by Baum
[Title Page and Foreword by Dr. Richard Reisch]: The title page and foreword introduce the 7th edition of Richard Baum's work on modern accounting methods. Dr. Richard Reisch provides a historical overview of accounting, tracing its roots to Pacioli's double-entry system while emphasizing the need for modernization to meet the demands of contemporary economic life. He discusses the bridge between legal requirements and accounting practice, noting the transition from manual labor to machine-assisted methods and the integration of accounting with statistics and business management. [Table of Contents]: A comprehensive table of contents detailing the structure of the book. It covers general development trends, rationalization, legal questions in Germany and Austria, various manual and mechanical bookkeeping forms (such as the American Journal and card systems), and a detailed section on machine-based accounting including specific brands like Mercedes, Remington, and Hollerith. [Part 1, Chapter 1: The Rationalization of Bookkeeping]: This chapter discusses the application of 'Rationalization' and Taylorism to the field of accounting. Baum argues that traditional manual bookkeeping has become a bottleneck in modern business. By applying scientific management principles—such as the analysis of time and motion, division of labor between qualified organizers and less-skilled clerks, and the use of mechanical tools—accounting can be transformed from a 'necessary evil' into a vital management instrument that provides real-time data. [Part 1, Chapter 2: The Emergence of Modern Bookkeeping Methods]: Baum explores the transition from individual, historical record-keeping to standardized, mass-data processing in large enterprises. He argues that despite the perceived 'uniqueness' of every business, accounting can be reduced to universal elements suitable for mechanical processing. The chapter defines the goals of modern accounting: increased performance through sub-segmentation, daily balancing, and reduced effort through labor division and mechanical duplication (carbon copies). [Part 1, Chapter 3: Legal Questions and the Orderliness of Bookkeeping]: This section addresses the legal validity of modern bookkeeping methods, specifically loose-leaf and card-based systems, under German commercial (HGB) and tax law (RAO). Baum references the work of Johann Friedrich Schär to argue that the 'bound book' requirement is secondary to the principles of completeness and clarity. He details specific control mechanisms, such as chronological registers and balance control books, that ensure the security and evidentiary value of loose-leaf systems against potential fraud. [Advantages and Legal Recognition of Modern Accounting Methods]: Baum details the practical advantages of monthly balance controls (Saldokontrolle) for monitoring customer payment behavior and ensuring synchronization between main and subsidiary ledgers. He provides a significant legal perspective through an opinion by Dr. Staub, arguing that the German Commercial Code's (HGB) preference for bound books is instructional rather than strictly mandatory, provided the accounting remains orderly and transparent. The section emphasizes that modern card-based systems can overcome traditional objections through systematic numbering and summary ledgers. [The Berlin Chamber of Commerce Opinion on Loose-Leaf Systems (1927)]: This segment reproduces and analyzes the landmark 1927 opinion from the Berlin Chamber of Commerce (IHK) regarding the admissibility of loose-leaf and card-based accounting. Influenced by academic research from Prof. Nicklisch and Dr. Hummel, the opinion shifts from a strict requirement for bound books to a functional definition of 'orderly accounting.' It establishes seven specific criteria for loose-leaf systems to maintain evidentiary value, including chronological entry, clear cross-referencing to vouchers, and safeguards against the removal or falsification of pages. The German Ministry of Finance's endorsement of this view is also noted. [Legal Status in Stuttgart and Austria]: A comparison of legal interpretations across different jurisdictions. The Stuttgart Chamber of Commerce emphasizes that the spirit of the law (HGB §38) is to ensure a clear overview of assets, not to mandate specific technical forms. In Austria, the text notes a transition from silent tolerance to formal recognition of carbon-copy (Durchschreibe) and loose-leaf systems by the Ministry of Finance in 1927, shifting focus from the physical form of books to the integrity and continuity of their content. [Chapter 4: Evolution of Accounting Forms and Book Planning]: Baum traces the historical development of accounting from Paciolo's 1494 foundations through Italian, German, French, English, and American variations. He argues for the rationalization of the 'Bücherplan' (book plan), warning against redundant records and advocating for the consolidation of related ledgers. The section identifies five essential stages of accounting (Voucher, Journal/Cash, Balance Account, Ledger, Balance Sheet) and discusses how modern methods allow for skipping or combining these stages to improve speed and clarity. [The Chart of Accounts (Kontenplan) and Classification Systems]: This section discusses the strategic importance of the chart of accounts (Kontenplan) as the 'blueprint' of a business. Baum explains different classification systems (one, two, and three-account systems) and provides detailed examples of account structures for spirit factories, general industrial plants, and commercial enterprises. He emphasizes that the chart of accounts must be tailored to the specific operational nature of the business to provide meaningful data for management and calculation. [American Balance Sheet Standards and Account Symbols]: Baum presents a detailed American balance sheet and P&L schema based on Federal Reserve Board standards, highlighting the high degree of transparency in US reporting compared to German practices. He then discusses the use of symbols (letters and numbers) for account identification. He argues that systematic abbreviations improve efficiency and reduce errors, provided they are logically structured into main, group, and individual account levels. [Booking Symbols and Internal Controls]: The text explains the use of operational symbols (+ for credit, - for debit) to simplify the booking process for junior staff and improve oversight. Baum discusses the inherent controls of double-entry bookkeeping but warns that they do not catch all errors, such as mispostings between similar accounts or intentional fraud. He references Dr. Ernst Jenny's work on 'backdoors' in accounting and stresses the importance of reconciling accounts with external sources like bank statements. [Advanced Balance Control (Saldenkontrolle)]: Baum provides a deep dive into 'Saldenkontrolle' (balance control), a method that ensures the sum of all primary entries matches the difference between old and new balances. He discusses the views of experts like Meyerheim and Seidel on the necessity of this control in manual versus machine-based systems. The 'Moa' system is cited as an example of how daily balance controls can eliminate the month-end rush and ensure the trial balance is always ready. [Chapter 5: Closing the Books and Economic Analysis]: The final segment of this chunk discusses modernizing the closing process by moving away from rigid ledger-based balance accounts toward independent financial statements. Baum advocates for 'economic accounting' (Wirtschaftlichkeitsrechnung), which uses accounting data for statistical analysis and management decisions. He introduces the concept of 'financial and operating ratios' from American thinkers like Bliss and Schmalz to diagnose business health beyond simple profit and loss. [Financial Ratios and Performance Metrics according to Bliss]: This segment details a system of financial ratios and performance metrics based on the work of Bliss (Financial and operating ratios in management). It categorizes measures into profitability (ROI, profit margins), production and overhead costs, capital turnover speed, and financial value relationships such as liquidity and capital structure. [Model Profit and Loss Statement (Finney)]: A practical example of a Profit and Loss (P&L) statement based on Finney's 'Principles of Accounting'. It provides a step-by-step calculation from gross sales to net period profit, including deductions for returns, manufacturing costs, sales costs, and administrative expenses. [Chapter Six: Methods of the Journal-Ledger]: Chapter six discusses the evolving role of the journal (daybook) in modern accounting. While traditionally seen as the cornerstone of bookkeeping, the author notes that modern methods often replace the formal journal with organized vouchers (Belege). However, the journal remains useful for providing chronological overviews and facilitating decentralized accounting through duplicate copies. [The Control Function of the Journal and the American Journal Method]: This segment discusses the secondary function of the journal as a control mechanism, arguing that its role in preventing loss or manipulation of records often outweighs its primary accounting purpose. It introduces the concept of splitting the journal into specialized books (e.g., cash journal vs. primanota) and describes the 'American Journal' as a combination of the journal and ledger, suitable for smaller businesses. The text also mentions Schigut's method of extreme journal separation adapted for mechanical processing. [Tabular Accounting and the German Table Accounting System]: This section provides detailed schemas for the American Journal and the 'German Table Accounting' (Deutsche Tabellenbuchführung) developed by Th. Möllen based on Prof. Huber's work. It explains how tabular layouts eliminate the need for separate ledgers and facilitate rapid closing of accounts and interim balance sheets. The method emphasizes reducing writing work by treating accounting as a calculation task rather than a narrative one, utilizing pre-printed forms and account numbers. [Interim Results Calculation and Universal Accounting Systems]: A technical analysis of interim result calculations and various 'Universal' or 'Register' accounting systems. It compares older and newer forms of calculating profit and loss from asset changes versus expense/income accounts. It details Jannings' Universal Accounting and the 'System Weiß' Register Accounting, which uses numerical symbols for accounts to simplify the journal-ledger relationship, aiming for a system that requires only two books. [The Columbus Journal and Specialized Small Business Accounting]: This segment describes the 'Columbus Journal', which integrates the primary entry, journal, and ledger into a single folio using variable account designations. It also introduces 'Handwerker-Buchführung' (Artisan Accounting) by Friedrich and Fuhlrott, designed specifically for small businesses to comply with tax laws without requiring deep accounting knowledge, replacing technical terms with concrete business descriptions. [Geffers' Journal-Ledger for Deep-Sea Fisheries]: An examination of Hermann Geffers' specialized accounting system for the deep-sea fishing industry. The system uses a journal-ledger hybrid where entries are made directly onto account pages within the journal. It emphasizes the importance of quarterly interim balances due to the irregular nature of fishing yields and insurance premiums, providing specific schemas for fleet management and operational results. [Vertical Accounting Systems: Infinitum, Ka, and the German Diary]: This section reviews several 'vertical' accounting modifications, including Dreyer's 'Infinitum' and Schönwald's 'Ka' (Concentration) method, which attempt to overcome the horizontal space limitations of the American Journal. It also details Meyerheim's 'Deutsches Tagebuch' (German Diary), a simplified system for small traders that tracks cash, debts, and tax obligations without traditional double-entry complexity, using a 'Majordomus' overview sheet for control. [Modernization: Reducing Book Volume and Expanding Account Scope]: The author discusses the modern trend toward reducing the number of physical books while increasing the number of accounts to meet the analytical needs of large enterprises. It critiques the 'mixed' commodity account and advocates for separating inventory from sales results. Schigut's 'Automatic Accounting' is highlighted for its use of individual vouchers and account journals, which allow for daily trial balances and better labor division in mechanical accounting environments. [Meyerheim's Combined Ledger and Balance Book]: A detailed look at Meyerheim's 'Combined Ledger and Balance Book', which uses a staggered (staffel) layout to integrate monthly balances directly into the closing process. By using different ink colors for debits and credits, the system allows for an immediate visual determination of profit or loss and reduces the year-end workload by distributing closing operations throughout the year. [The Mechanics of Carbon-Copy and Card Accounting]: The second part of the text focuses on the technical implementation of modern accounting: the combination of card indexes (Kartei) and carbon-copy (Durchschreibe) methods. It addresses legal concerns regarding loose-leaf systems, arguing that the simultaneous recording of entries in the journal and ledger via carbon copy provides superior security against errors and fraud. It discusses the advantages of card systems for labor division, space saving, and real-time account status visibility. [Implementation and Labor Division in Carbon-Copy Systems]: This segment explores the practical application of carbon-copy accounting, emphasizing the 'Safety First' principle through balance control (Saldokontrolle). It explains how the method eliminates the need for manual cross-checking (Kollationieren) and changes the traditional division of labor. The text also touches upon the transition from manual carbon-copying to the use of 'billing' typewriters and early accounting machines. [The Hinz and Moa Carbon-Copy Methods]: The final section details the 'Hinz Method' (the oldest German carbon-copy system) and the 'Moa' (Modern Accounting) system. It describes the technical setup where the primary entry is made in a bound book while the ledger card is updated via carbon copy. It provides specific applications for payroll (Lohnverrechnung), inventory (Lagerbuchhaltung), and cost accounting (Kostenbuchhaltung), highlighting the organizational benefits of these integrated systems. [Verbindung von Betriebs- und kaufmännischer Buchhaltung]: This section outlines four main methods for integrating commercial and cost accounting (Betriebsbuchhaltung). It highlights the advantages of the Elliott Fisher accounting machine in facilitating simultaneous entries across different ledgers and critiques manual handwriting systems for their limitations in multi-copy processing and potential for errors. [„Moa“-Lagerbuchhaltung sowie Lohn- und Gehaltsbuchhaltung]: Detailed explanation of the 'Moa' approach to inventory and payroll accounting. The author emphasizes that accurate monthly profit and loss statements require precise inventory tracking of material costs. The section describes the technical execution of inventory entries and the simplification of payroll through carbon-copying labor lists and employee cards. [Technische Details und Varianten der „Moa“-Buchhaltung]: A technical discussion on the physical structure of journals (perforation) and the use of card-based carbon copies versus account sheets. It critiques methods that reverse debit/credit columns on cards, arguing they destroy the journal's reconciliation value, and explains how the 'Moa' system avoids these pitfalls using specific machine-assisted formatting. [Deutsche Selbstkontrollbuchführung (DSB)]: Introduction to the German Self-Control Accounting (DSB) method. It focuses on the 'one-time writing' principle, the use of fixed journals for security (unfalsifiability), and the technical apparatus (Rümmel patents) used to hold cards and carbon paper. The text argues that accounting is an internal control system rather than just a mechanical task. [Deutsche Sicherheits-Schnell-Buchführung und Handels- und Gewerbebuchführung]: Covers two specialized branches of the DSB: the Safety-Quick Accounting for larger operations using loose-leaf journals and the Trade and Craft Accounting (DGB) for smaller businesses. It details the physical dimensions of the forms and the simplified entry processes for businesses with lower transaction volumes. [Kümmlers Betriebsbuchführung und Belles Kalkulationsbuchführung]: This section describes Kümmler's and Belles' specialized systems for industrial cost accounting. It includes detailed table structures for journals and explains how these systems integrate with commercial accounting to provide monthly balances, performance metrics, and accurate price calculations without relying on dangerous 'standard' estimates. [Simplex-Durchschreibe-Buchführung]: This section describes the 'Simplex' or 'Simpler' bookkeeping method by Verlag A. Stollmaier. It focuses on achieving simultaneous debit and credit entries using carbonized journal sheets placed directly onto account cards without complex machinery. The text provides a practical example of recording outgoing invoices and explains the symbolic coding system used to link journal entries with customer cards. [Simplex-Durchschreibejournal System Stollmayer (Tables and Further Details)]: Detailed tables illustrating the Simplex system's journal and account cards are presented. The text explains how payment deductions (discounts) are handled transparently and how daily balances can be generated by adding journal sheets. It also discusses the flexibility of the system, which can be limited to current accounts or expanded to include general ledger accounts via card files. [Die taylorisierte Kartographbuchhaltung (Prof. Alois Mezl)]: Prof. Alois Mezl's 'Kartographbuchhaltung' (1921) is introduced as a system applying Taylorist principles to bank accounting. It emphasizes a rigorous triple-control mechanism (pre-control, side reconciliation, and post-control) to ensure maximum security against errors. While technically sophisticated and offering immediate balance readiness, the text notes its limited practical adoption despite its theoretical advantages. [Kopiegrasbuchhaltung and Momentjournal (Rudolf Reimisch)]: This segment covers the 'Kopiegrasbuchhaltung' and Rudolf Reimisch's 'Momentjournal' (Sanreco). Reimisch's method is notable for its focus on rapid determination of net assets and profit through a unique column arrangement for purchase and sales accounts. The text includes detailed schemas for income calculation, asset statements, and capital accounting, highlighting the system's focus on inventory value and turnover. [Duplerbuchführung and Minor Systems]: Discusses Arthur Bartsch's 'Duplerbuchführung', which uses a bound primary book with specific column layouts for cash and goods. It also briefly mentions several derivatives of the Hinz method, such as the Rational-Durchschreibebuchhaltung, Konto Metzger (which lacks balance control), and N.O.G.-Buchführung, noting they offer few significant innovations. [Universal-Multiplex-Buchhaltung (Wilhelm A. Wilhelm)]: Wilhelm A. Wilhelm's 'Universal-Multiplex-Buchhaltung' (1925) is examined. The system uses multiple specialized journals (entry and exit diaries) to group transactions by economic criteria during initial recording. A unique feature is the 'Vormerkjournal' or 'Laufzettel' (tracking slip) system designed to prevent transcription errors, though the author critiques it as potentially adding complexity and new error sources. [Klebebuchführungen: Schiemer and Optimar]: This section explores 'Klebebuchführungen' (adhesive bookkeeping), specifically Schiemer’s 'Neue Deutsche Doppelbuchführung'. Instead of direct transcription, entries are made on perforated strips that are then pasted onto account sheets. The text details the mechanical process, the use of numerical symbols for accounts, and mentions the 'Optimar' system by Paul Buttke as a more technically advanced but less distributed alternative. [Zehntes Kapitel: Durchschreibeverfahren mit Urschrift auf dem Konto (Ruf-Buchhaltung)]: Chapter 10 focuses on systems where the original entry is made directly on the account card (Urschrift auf dem Konto), pioneered by Alfons Ruf in 1918. The Ruf system is described in depth, including its international success, the use of account symbols, the 'Addierlineal' (grouping ruler) for daily balances, and its adaptability for branch accounting and foreign currencies. It also mentions the Ruf bookkeeping machine as a tool for uniform script. [Die Schaber-Buchhaltungen (Fritz Schaber)]: Fritz Schaber's bookkeeping organization is detailed, highlighting its technical innovations like the 'Ein-Zug-Verfahren' (one-pull process) which allows simultaneous debit and credit entries. The text explains Schaber's use of a 'Tagesabstimmbuch' to anchor loose entries in bound books and describes various iterations of the system (1-pull, 2-sheet, 3-sheet). Extensive tables demonstrate the journal and account layouts for debtors, creditors, and general ledger accounts. [Die Taylorix-Buchhaltung (J. P. Stiegler)]: The Taylorix system, introduced to Germany by J. P. Stiegler, is presented as a leading loose-leaf transcription method. It gained prominence during the German inflation for its ability to handle multiple currencies. Key features include a structured chart of accounts (group, general, and individual accounts), automated grouping for daily balances, and specialized versions for payroll, banking, and hotels. The section concludes with high praise from accounting scholar Prof. Dr. J. F. Schär. [Taylorix: Legal Validity and Educational Tools]: This segment addresses the legal standing of the Taylorix method, citing endorsements from the Ministry of Finance and Chambers of Commerce. It also notes the system's expansion into cameralistic accounting for municipalities and its significant role in commercial education through specialized teaching materials. [Die „Fortschritt“-Durchschreibebuchhaltung (Moment-Buchhaltung)]: The 'Fortschritt' or 'Moment' system from Freiburg is described, distinguishing between its 2-sheet and 3-sheet variants. The 3-sheet method automates grouping for daily balances by using a 'Sammelkarte' (summary card) as a second carbon copy. The text provides a comprehensive chart of accounts based on the Dewey decimal system and explains how the system facilitates division of labor in large enterprises by separating general ledger and current account duties. [Fortschritt-Ein-Zug-Buchhaltung and Uno-Buchhaltung]: Covers the Fortschritt 'Ein-Zug' method, which aims to record two account entries in one step, and the 'Uno-Buchhaltung' distributed by Rüegg-Naegeli in Zurich. The Uno system is noted for its high-quality mechanical apparatus (metal slide) and its widespread use in Swiss public administration, despite offering few methodological innovations over other transcription systems. [Die „Definitiv“-Kontroll-Buchhaltung]: The 'Definitiv' system is characterized by its versatility, combining various transcription methods (1, 2, and 3-column) and supporting both bound and loose-leaf formats. It features a patented aluminum booking plate with specialized clamping rails. The text describes its 'Lütenprinzip' for payroll (simultaneous entry of account, list, and pay envelope) and its extensive educational materials for self-study and schools. [Die „Oda“-Buchführung and Specialized Controls]: The Oda system is presented as a hybrid between transcription and American column bookkeeping. It uses a specialized 'Geld- und Lagebuch' and a unique account organization system where 40 cards are assigned to a 'Leitkarte' (master card). The text describes physical control tools like 'Zwischenwerfer' (colored cardboard triangles) and 'Reiter' (tabs) for dunning control and tracking removed cards. [Ruhfus-Mind-Drilling and Punktumbuchhaltung]: This final segment details the 'Ruhfus-Mind-Drilling' method, which eliminates traditional general ledger accounts in favor of 'Buchungssatzblätter' (entry set sheets) and a matrix-style summary. It features a mechanical color-coding system to prevent account mismatches. Also described is the 'Punktumbuchhaltung' by Josef Spindeldreher, which uses separate sheets for debits and credits and a specialized apparatus with needle rows (Dornen) for alignment. [Die Blattograph-Buchhaltung (Carl von Gazenhofen)]: Introduces Carl von Gazenhofen's 'Blattograph' system, which predates the Ruf method. It offers both manual and machine-based (Gardner machine) options and features single and triple-column systems. Gazenhofen advocates for bound primary books for chronological records while using loose sheets for accounts, emphasizing a 'memorial' style of entry where every transaction is explicitly debited and then credited. [Blattograph and Contograph Systems]: This segment details the Blattograph and Contograph accounting methods. It discusses Sazenhofen's 'statistical business accounting' and the integration of general ledger with cost accounting. The Contograph section emphasizes the use of a control book for monitoring account groups and the generation of a daily balance sheet. It introduces various financial ratios used for business analysis, such as the ratio of liquid assets to debt and the average collection period for receivables. [C-O, Conor, and Lur Accounting Methods]: A description of three specific Austrian accounting systems: C-O, Conor, and Lur. The C-O system uses a diary and grouped ledger accounts. The Conor system features a unique mechanical frame for holding journals and ledger sheets, allowing for quick insertion and removal. The Lur system, established in 1925, utilizes an aluminum writing apparatus and specialized ledger sheets with mahnreiter (reminder tabs) for debt management. [Roll and Mechanical Accounting: Schlayand, Medebu, and Meyerheim]: This section covers roll-based and mechanical accounting systems. It describes the evolution of the Schlayand method from unprinted strips to loose-leaf journals. The Medebu system uses drum pairs for account selection. Hugo Meyerheim's 'Symbol-Accounting' is highlighted for its use of mnemonic letter symbols for accounts and a specialized writing apparatus with automatic line marking and color-coded entries (black for debit, red for credit). [Meyerheim's Rationalized Accounting and the Unograph System]: Meyerheim's vision for a fully mechanized accounting system is explored, involving specialized account holders and multi-colored duplicate writing to ensure consistency between journals and ledgers. The segment also introduces the Unograph system by Otto Gärtner, which uniquely omits the journal entirely, performing both debit and credit entries directly onto ledger sheets using a specialized lever apparatus. [Transfer and Photographic Methods: Umdruck and Photo]: This chapter discusses methods for separating journal entry from ledger posting through transfer (Umdruck) and photography. The Umdruck process (e.g., Ormig) allows for multiple copies of a single entry to be transferred to various cards. Photographic methods like Fotomat automate the reproduction of journal lines onto light-sensitive ledger cards, facilitating decentralized accounting where journals and ledgers are kept in different locations. [General Principles of Machine Accounting]: An introduction to the methodology and technology of machine accounting. It defines what constitutes an 'accounting machine'—requiring both text/symbol capability and automatic calculation. The text argues that machines increase speed, accuracy, and provide automatic self-checks (e.g., zero-balance checks). It also addresses psychological and organizational challenges, such as staff resistance and the necessity of proper workflow preparation. [Types of Accounting Machines: Calculating Typewriters]: This segment categorizes and describes various calculating typewriters used in accounting. It highlights German models like AEG, Mercedes-Add-Elektro, and Urania-Vega, as well as American models like Ellis, Underwood, and Remington. Key features discussed include automatic balance calculation, multi-register systems for simultaneous journal and ledger posting, and specialized paper handling mechanisms (e.g., AEG's Kippleiste). [Specialized Systems: Elliott-Fisher and Burroughs]: Detailed look at the Elliott-Fisher flatbed writing machine and the Burroughs (including Moon-Hopkins) calculating machines. Elliott-Fisher is praised for its 'vertical layering' of the work process, allowing simultaneous creation of invoices, ledgers, and journals. The Burroughs section focuses on its automatic balancing, multi-register capabilities, and its use in payroll and statistical work. The Moa-method by Ernst Springer is cited as a prime example of integrating operational and financial accounting using these machines. [Registration and Punch Card Machines]: The final segment covers registration-based accounting machines (National, Unter) and punch card systems (Hollerith, Powers). Registration machines are ideal for high-volume, standardized transactions like savings banks. Punch card systems represent the pinnacle of automation, where data is 'translated' into holes, then sorted and tabulated electrically. The text explains the logic of the 45-column card, the sorting process, and the economic benefits of multi-purpose data cards in large-scale operations.
The title page and foreword introduce the 7th edition of Richard Baum's work on modern accounting methods. Dr. Richard Reisch provides a historical overview of accounting, tracing its roots to Pacioli's double-entry system while emphasizing the need for modernization to meet the demands of contemporary economic life. He discusses the bridge between legal requirements and accounting practice, noting the transition from manual labor to machine-assisted methods and the integration of accounting with statistics and business management.
Read full textA comprehensive table of contents detailing the structure of the book. It covers general development trends, rationalization, legal questions in Germany and Austria, various manual and mechanical bookkeeping forms (such as the American Journal and card systems), and a detailed section on machine-based accounting including specific brands like Mercedes, Remington, and Hollerith.
Read full textThis chapter discusses the application of 'Rationalization' and Taylorism to the field of accounting. Baum argues that traditional manual bookkeeping has become a bottleneck in modern business. By applying scientific management principles—such as the analysis of time and motion, division of labor between qualified organizers and less-skilled clerks, and the use of mechanical tools—accounting can be transformed from a 'necessary evil' into a vital management instrument that provides real-time data.
Read full textBaum explores the transition from individual, historical record-keeping to standardized, mass-data processing in large enterprises. He argues that despite the perceived 'uniqueness' of every business, accounting can be reduced to universal elements suitable for mechanical processing. The chapter defines the goals of modern accounting: increased performance through sub-segmentation, daily balancing, and reduced effort through labor division and mechanical duplication (carbon copies).
Read full textThis section addresses the legal validity of modern bookkeeping methods, specifically loose-leaf and card-based systems, under German commercial (HGB) and tax law (RAO). Baum references the work of Johann Friedrich Schär to argue that the 'bound book' requirement is secondary to the principles of completeness and clarity. He details specific control mechanisms, such as chronological registers and balance control books, that ensure the security and evidentiary value of loose-leaf systems against potential fraud.
Read full textBaum details the practical advantages of monthly balance controls (Saldokontrolle) for monitoring customer payment behavior and ensuring synchronization between main and subsidiary ledgers. He provides a significant legal perspective through an opinion by Dr. Staub, arguing that the German Commercial Code's (HGB) preference for bound books is instructional rather than strictly mandatory, provided the accounting remains orderly and transparent. The section emphasizes that modern card-based systems can overcome traditional objections through systematic numbering and summary ledgers.
Read full textThis segment reproduces and analyzes the landmark 1927 opinion from the Berlin Chamber of Commerce (IHK) regarding the admissibility of loose-leaf and card-based accounting. Influenced by academic research from Prof. Nicklisch and Dr. Hummel, the opinion shifts from a strict requirement for bound books to a functional definition of 'orderly accounting.' It establishes seven specific criteria for loose-leaf systems to maintain evidentiary value, including chronological entry, clear cross-referencing to vouchers, and safeguards against the removal or falsification of pages. The German Ministry of Finance's endorsement of this view is also noted.
Read full textA comparison of legal interpretations across different jurisdictions. The Stuttgart Chamber of Commerce emphasizes that the spirit of the law (HGB §38) is to ensure a clear overview of assets, not to mandate specific technical forms. In Austria, the text notes a transition from silent tolerance to formal recognition of carbon-copy (Durchschreibe) and loose-leaf systems by the Ministry of Finance in 1927, shifting focus from the physical form of books to the integrity and continuity of their content.
Read full textBaum traces the historical development of accounting from Paciolo's 1494 foundations through Italian, German, French, English, and American variations. He argues for the rationalization of the 'Bücherplan' (book plan), warning against redundant records and advocating for the consolidation of related ledgers. The section identifies five essential stages of accounting (Voucher, Journal/Cash, Balance Account, Ledger, Balance Sheet) and discusses how modern methods allow for skipping or combining these stages to improve speed and clarity.
Read full textThis section discusses the strategic importance of the chart of accounts (Kontenplan) as the 'blueprint' of a business. Baum explains different classification systems (one, two, and three-account systems) and provides detailed examples of account structures for spirit factories, general industrial plants, and commercial enterprises. He emphasizes that the chart of accounts must be tailored to the specific operational nature of the business to provide meaningful data for management and calculation.
Read full textBaum presents a detailed American balance sheet and P&L schema based on Federal Reserve Board standards, highlighting the high degree of transparency in US reporting compared to German practices. He then discusses the use of symbols (letters and numbers) for account identification. He argues that systematic abbreviations improve efficiency and reduce errors, provided they are logically structured into main, group, and individual account levels.
Read full textThe text explains the use of operational symbols (+ for credit, - for debit) to simplify the booking process for junior staff and improve oversight. Baum discusses the inherent controls of double-entry bookkeeping but warns that they do not catch all errors, such as mispostings between similar accounts or intentional fraud. He references Dr. Ernst Jenny's work on 'backdoors' in accounting and stresses the importance of reconciling accounts with external sources like bank statements.
Read full textBaum provides a deep dive into 'Saldenkontrolle' (balance control), a method that ensures the sum of all primary entries matches the difference between old and new balances. He discusses the views of experts like Meyerheim and Seidel on the necessity of this control in manual versus machine-based systems. The 'Moa' system is cited as an example of how daily balance controls can eliminate the month-end rush and ensure the trial balance is always ready.
Read full textThe final segment of this chunk discusses modernizing the closing process by moving away from rigid ledger-based balance accounts toward independent financial statements. Baum advocates for 'economic accounting' (Wirtschaftlichkeitsrechnung), which uses accounting data for statistical analysis and management decisions. He introduces the concept of 'financial and operating ratios' from American thinkers like Bliss and Schmalz to diagnose business health beyond simple profit and loss.
Read full textThis segment details a system of financial ratios and performance metrics based on the work of Bliss (Financial and operating ratios in management). It categorizes measures into profitability (ROI, profit margins), production and overhead costs, capital turnover speed, and financial value relationships such as liquidity and capital structure.
Read full textA practical example of a Profit and Loss (P&L) statement based on Finney's 'Principles of Accounting'. It provides a step-by-step calculation from gross sales to net period profit, including deductions for returns, manufacturing costs, sales costs, and administrative expenses.
Read full textChapter six discusses the evolving role of the journal (daybook) in modern accounting. While traditionally seen as the cornerstone of bookkeeping, the author notes that modern methods often replace the formal journal with organized vouchers (Belege). However, the journal remains useful for providing chronological overviews and facilitating decentralized accounting through duplicate copies.
Read full textThis segment discusses the secondary function of the journal as a control mechanism, arguing that its role in preventing loss or manipulation of records often outweighs its primary accounting purpose. It introduces the concept of splitting the journal into specialized books (e.g., cash journal vs. primanota) and describes the 'American Journal' as a combination of the journal and ledger, suitable for smaller businesses. The text also mentions Schigut's method of extreme journal separation adapted for mechanical processing.
Read full textThis section provides detailed schemas for the American Journal and the 'German Table Accounting' (Deutsche Tabellenbuchführung) developed by Th. Möllen based on Prof. Huber's work. It explains how tabular layouts eliminate the need for separate ledgers and facilitate rapid closing of accounts and interim balance sheets. The method emphasizes reducing writing work by treating accounting as a calculation task rather than a narrative one, utilizing pre-printed forms and account numbers.
Read full textA technical analysis of interim result calculations and various 'Universal' or 'Register' accounting systems. It compares older and newer forms of calculating profit and loss from asset changes versus expense/income accounts. It details Jannings' Universal Accounting and the 'System Weiß' Register Accounting, which uses numerical symbols for accounts to simplify the journal-ledger relationship, aiming for a system that requires only two books.
Read full textThis segment describes the 'Columbus Journal', which integrates the primary entry, journal, and ledger into a single folio using variable account designations. It also introduces 'Handwerker-Buchführung' (Artisan Accounting) by Friedrich and Fuhlrott, designed specifically for small businesses to comply with tax laws without requiring deep accounting knowledge, replacing technical terms with concrete business descriptions.
Read full textAn examination of Hermann Geffers' specialized accounting system for the deep-sea fishing industry. The system uses a journal-ledger hybrid where entries are made directly onto account pages within the journal. It emphasizes the importance of quarterly interim balances due to the irregular nature of fishing yields and insurance premiums, providing specific schemas for fleet management and operational results.
Read full textThis section reviews several 'vertical' accounting modifications, including Dreyer's 'Infinitum' and Schönwald's 'Ka' (Concentration) method, which attempt to overcome the horizontal space limitations of the American Journal. It also details Meyerheim's 'Deutsches Tagebuch' (German Diary), a simplified system for small traders that tracks cash, debts, and tax obligations without traditional double-entry complexity, using a 'Majordomus' overview sheet for control.
Read full textThe author discusses the modern trend toward reducing the number of physical books while increasing the number of accounts to meet the analytical needs of large enterprises. It critiques the 'mixed' commodity account and advocates for separating inventory from sales results. Schigut's 'Automatic Accounting' is highlighted for its use of individual vouchers and account journals, which allow for daily trial balances and better labor division in mechanical accounting environments.
Read full textA detailed look at Meyerheim's 'Combined Ledger and Balance Book', which uses a staggered (staffel) layout to integrate monthly balances directly into the closing process. By using different ink colors for debits and credits, the system allows for an immediate visual determination of profit or loss and reduces the year-end workload by distributing closing operations throughout the year.
Read full textThe second part of the text focuses on the technical implementation of modern accounting: the combination of card indexes (Kartei) and carbon-copy (Durchschreibe) methods. It addresses legal concerns regarding loose-leaf systems, arguing that the simultaneous recording of entries in the journal and ledger via carbon copy provides superior security against errors and fraud. It discusses the advantages of card systems for labor division, space saving, and real-time account status visibility.
Read full textThis segment explores the practical application of carbon-copy accounting, emphasizing the 'Safety First' principle through balance control (Saldokontrolle). It explains how the method eliminates the need for manual cross-checking (Kollationieren) and changes the traditional division of labor. The text also touches upon the transition from manual carbon-copying to the use of 'billing' typewriters and early accounting machines.
Read full textThe final section details the 'Hinz Method' (the oldest German carbon-copy system) and the 'Moa' (Modern Accounting) system. It describes the technical setup where the primary entry is made in a bound book while the ledger card is updated via carbon copy. It provides specific applications for payroll (Lohnverrechnung), inventory (Lagerbuchhaltung), and cost accounting (Kostenbuchhaltung), highlighting the organizational benefits of these integrated systems.
Read full textThis section outlines four main methods for integrating commercial and cost accounting (Betriebsbuchhaltung). It highlights the advantages of the Elliott Fisher accounting machine in facilitating simultaneous entries across different ledgers and critiques manual handwriting systems for their limitations in multi-copy processing and potential for errors.
Read full textDetailed explanation of the 'Moa' approach to inventory and payroll accounting. The author emphasizes that accurate monthly profit and loss statements require precise inventory tracking of material costs. The section describes the technical execution of inventory entries and the simplification of payroll through carbon-copying labor lists and employee cards.
Read full textA technical discussion on the physical structure of journals (perforation) and the use of card-based carbon copies versus account sheets. It critiques methods that reverse debit/credit columns on cards, arguing they destroy the journal's reconciliation value, and explains how the 'Moa' system avoids these pitfalls using specific machine-assisted formatting.
Read full textIntroduction to the German Self-Control Accounting (DSB) method. It focuses on the 'one-time writing' principle, the use of fixed journals for security (unfalsifiability), and the technical apparatus (Rümmel patents) used to hold cards and carbon paper. The text argues that accounting is an internal control system rather than just a mechanical task.
Read full textCovers two specialized branches of the DSB: the Safety-Quick Accounting for larger operations using loose-leaf journals and the Trade and Craft Accounting (DGB) for smaller businesses. It details the physical dimensions of the forms and the simplified entry processes for businesses with lower transaction volumes.
Read full textThis section describes Kümmler's and Belles' specialized systems for industrial cost accounting. It includes detailed table structures for journals and explains how these systems integrate with commercial accounting to provide monthly balances, performance metrics, and accurate price calculations without relying on dangerous 'standard' estimates.
Read full textThis section describes the 'Simplex' or 'Simpler' bookkeeping method by Verlag A. Stollmaier. It focuses on achieving simultaneous debit and credit entries using carbonized journal sheets placed directly onto account cards without complex machinery. The text provides a practical example of recording outgoing invoices and explains the symbolic coding system used to link journal entries with customer cards.
Read full textDetailed tables illustrating the Simplex system's journal and account cards are presented. The text explains how payment deductions (discounts) are handled transparently and how daily balances can be generated by adding journal sheets. It also discusses the flexibility of the system, which can be limited to current accounts or expanded to include general ledger accounts via card files.
Read full textProf. Alois Mezl's 'Kartographbuchhaltung' (1921) is introduced as a system applying Taylorist principles to bank accounting. It emphasizes a rigorous triple-control mechanism (pre-control, side reconciliation, and post-control) to ensure maximum security against errors. While technically sophisticated and offering immediate balance readiness, the text notes its limited practical adoption despite its theoretical advantages.
Read full textThis segment covers the 'Kopiegrasbuchhaltung' and Rudolf Reimisch's 'Momentjournal' (Sanreco). Reimisch's method is notable for its focus on rapid determination of net assets and profit through a unique column arrangement for purchase and sales accounts. The text includes detailed schemas for income calculation, asset statements, and capital accounting, highlighting the system's focus on inventory value and turnover.
Read full textDiscusses Arthur Bartsch's 'Duplerbuchführung', which uses a bound primary book with specific column layouts for cash and goods. It also briefly mentions several derivatives of the Hinz method, such as the Rational-Durchschreibebuchhaltung, Konto Metzger (which lacks balance control), and N.O.G.-Buchführung, noting they offer few significant innovations.
Read full textWilhelm A. Wilhelm's 'Universal-Multiplex-Buchhaltung' (1925) is examined. The system uses multiple specialized journals (entry and exit diaries) to group transactions by economic criteria during initial recording. A unique feature is the 'Vormerkjournal' or 'Laufzettel' (tracking slip) system designed to prevent transcription errors, though the author critiques it as potentially adding complexity and new error sources.
Read full textThis section explores 'Klebebuchführungen' (adhesive bookkeeping), specifically Schiemer’s 'Neue Deutsche Doppelbuchführung'. Instead of direct transcription, entries are made on perforated strips that are then pasted onto account sheets. The text details the mechanical process, the use of numerical symbols for accounts, and mentions the 'Optimar' system by Paul Buttke as a more technically advanced but less distributed alternative.
Read full textChapter 10 focuses on systems where the original entry is made directly on the account card (Urschrift auf dem Konto), pioneered by Alfons Ruf in 1918. The Ruf system is described in depth, including its international success, the use of account symbols, the 'Addierlineal' (grouping ruler) for daily balances, and its adaptability for branch accounting and foreign currencies. It also mentions the Ruf bookkeeping machine as a tool for uniform script.
Read full textFritz Schaber's bookkeeping organization is detailed, highlighting its technical innovations like the 'Ein-Zug-Verfahren' (one-pull process) which allows simultaneous debit and credit entries. The text explains Schaber's use of a 'Tagesabstimmbuch' to anchor loose entries in bound books and describes various iterations of the system (1-pull, 2-sheet, 3-sheet). Extensive tables demonstrate the journal and account layouts for debtors, creditors, and general ledger accounts.
Read full textThe Taylorix system, introduced to Germany by J. P. Stiegler, is presented as a leading loose-leaf transcription method. It gained prominence during the German inflation for its ability to handle multiple currencies. Key features include a structured chart of accounts (group, general, and individual accounts), automated grouping for daily balances, and specialized versions for payroll, banking, and hotels. The section concludes with high praise from accounting scholar Prof. Dr. J. F. Schär.
Read full textThis segment addresses the legal standing of the Taylorix method, citing endorsements from the Ministry of Finance and Chambers of Commerce. It also notes the system's expansion into cameralistic accounting for municipalities and its significant role in commercial education through specialized teaching materials.
Read full textThe 'Fortschritt' or 'Moment' system from Freiburg is described, distinguishing between its 2-sheet and 3-sheet variants. The 3-sheet method automates grouping for daily balances by using a 'Sammelkarte' (summary card) as a second carbon copy. The text provides a comprehensive chart of accounts based on the Dewey decimal system and explains how the system facilitates division of labor in large enterprises by separating general ledger and current account duties.
Read full textCovers the Fortschritt 'Ein-Zug' method, which aims to record two account entries in one step, and the 'Uno-Buchhaltung' distributed by Rüegg-Naegeli in Zurich. The Uno system is noted for its high-quality mechanical apparatus (metal slide) and its widespread use in Swiss public administration, despite offering few methodological innovations over other transcription systems.
Read full textThe 'Definitiv' system is characterized by its versatility, combining various transcription methods (1, 2, and 3-column) and supporting both bound and loose-leaf formats. It features a patented aluminum booking plate with specialized clamping rails. The text describes its 'Lütenprinzip' for payroll (simultaneous entry of account, list, and pay envelope) and its extensive educational materials for self-study and schools.
Read full textThe Oda system is presented as a hybrid between transcription and American column bookkeeping. It uses a specialized 'Geld- und Lagebuch' and a unique account organization system where 40 cards are assigned to a 'Leitkarte' (master card). The text describes physical control tools like 'Zwischenwerfer' (colored cardboard triangles) and 'Reiter' (tabs) for dunning control and tracking removed cards.
Read full textThis final segment details the 'Ruhfus-Mind-Drilling' method, which eliminates traditional general ledger accounts in favor of 'Buchungssatzblätter' (entry set sheets) and a matrix-style summary. It features a mechanical color-coding system to prevent account mismatches. Also described is the 'Punktumbuchhaltung' by Josef Spindeldreher, which uses separate sheets for debits and credits and a specialized apparatus with needle rows (Dornen) for alignment.
Read full textIntroduces Carl von Gazenhofen's 'Blattograph' system, which predates the Ruf method. It offers both manual and machine-based (Gardner machine) options and features single and triple-column systems. Gazenhofen advocates for bound primary books for chronological records while using loose sheets for accounts, emphasizing a 'memorial' style of entry where every transaction is explicitly debited and then credited.
Read full textThis segment details the Blattograph and Contograph accounting methods. It discusses Sazenhofen's 'statistical business accounting' and the integration of general ledger with cost accounting. The Contograph section emphasizes the use of a control book for monitoring account groups and the generation of a daily balance sheet. It introduces various financial ratios used for business analysis, such as the ratio of liquid assets to debt and the average collection period for receivables.
Read full textA description of three specific Austrian accounting systems: C-O, Conor, and Lur. The C-O system uses a diary and grouped ledger accounts. The Conor system features a unique mechanical frame for holding journals and ledger sheets, allowing for quick insertion and removal. The Lur system, established in 1925, utilizes an aluminum writing apparatus and specialized ledger sheets with mahnreiter (reminder tabs) for debt management.
Read full textThis section covers roll-based and mechanical accounting systems. It describes the evolution of the Schlayand method from unprinted strips to loose-leaf journals. The Medebu system uses drum pairs for account selection. Hugo Meyerheim's 'Symbol-Accounting' is highlighted for its use of mnemonic letter symbols for accounts and a specialized writing apparatus with automatic line marking and color-coded entries (black for debit, red for credit).
Read full textMeyerheim's vision for a fully mechanized accounting system is explored, involving specialized account holders and multi-colored duplicate writing to ensure consistency between journals and ledgers. The segment also introduces the Unograph system by Otto Gärtner, which uniquely omits the journal entirely, performing both debit and credit entries directly onto ledger sheets using a specialized lever apparatus.
Read full textThis chapter discusses methods for separating journal entry from ledger posting through transfer (Umdruck) and photography. The Umdruck process (e.g., Ormig) allows for multiple copies of a single entry to be transferred to various cards. Photographic methods like Fotomat automate the reproduction of journal lines onto light-sensitive ledger cards, facilitating decentralized accounting where journals and ledgers are kept in different locations.
Read full textAn introduction to the methodology and technology of machine accounting. It defines what constitutes an 'accounting machine'—requiring both text/symbol capability and automatic calculation. The text argues that machines increase speed, accuracy, and provide automatic self-checks (e.g., zero-balance checks). It also addresses psychological and organizational challenges, such as staff resistance and the necessity of proper workflow preparation.
Read full textThis segment categorizes and describes various calculating typewriters used in accounting. It highlights German models like AEG, Mercedes-Add-Elektro, and Urania-Vega, as well as American models like Ellis, Underwood, and Remington. Key features discussed include automatic balance calculation, multi-register systems for simultaneous journal and ledger posting, and specialized paper handling mechanisms (e.g., AEG's Kippleiste).
Read full textDetailed look at the Elliott-Fisher flatbed writing machine and the Burroughs (including Moon-Hopkins) calculating machines. Elliott-Fisher is praised for its 'vertical layering' of the work process, allowing simultaneous creation of invoices, ledgers, and journals. The Burroughs section focuses on its automatic balancing, multi-register capabilities, and its use in payroll and statistical work. The Moa-method by Ernst Springer is cited as a prime example of integrating operational and financial accounting using these machines.
Read full textThe final segment covers registration-based accounting machines (National, Unter) and punch card systems (Hollerith, Powers). Registration machines are ideal for high-volume, standardized transactions like savings banks. Punch card systems represent the pinnacle of automation, where data is 'translated' into holes, then sorted and tabulated electrically. The text explains the logic of the 45-column card, the sorting process, and the economic benefits of multi-purpose data cards in large-scale operations.
Read full text