696 lOIWA DEPARTMENT OF AGRICULTURE 



amount of cash on hand, as the gain may all be invested in a new team, 

 additional cows, or extra feed. On the other hand, the cash on hand 

 may be much larger than the year before, thus making the farmer feel 

 more prosperous, whereas the number of head of stock or the quantity 

 of feed on hand may be so much less that he has actually farmed at a 

 loss that year. 



The annual inventory shows the annual gain or loss on the farm 

 business, but it does not show what crops or what animals have made 

 a gain or loss. On nearly every farm where accounts have been kept, 

 the gain or loss for the year resulted from losses on several accounts 

 and gains on several accounts. In every case the farmer was much 

 surprised to see which accounts showed a gain and which a loss. Results 

 like these can only be shown by a complete system of accounts. 



FINANCIAL RECORD. 



A record of the receipts and expenditures on the farm is necessary 

 for a complete set of accounts. For this purpose a book called by 

 stationers a "broad daybook," or "journal," is used. The requirements 

 are that there be a place for a date on the left-hand side of the page, 

 a broad space in the middle of the page in which to write explanations, 

 and columns ruled for dollars and cents at the right. The page is 

 ruled and items are entered as shown in the sample account with potatoes 

 in Table II. The financial record book at the end of the year becomes 

 the completed account book and will have a summary of labor entered 

 in it from the work record as described later. 



A separate account is kept with real estate, each crop grown, each 

 class of animals, machinery, labor, interest, persons dealt with, bills 

 payable and bills receivable, and with such other items as may be found 

 necessary or convenient. 



The items that make up bills payable and bills receivable should be 

 listed in the inventory at the end of the year, as mentioned, either 

 from memoranda or in any other way which may be found convenient. 

 In closing out the inventory at the end of the year, the items for which 

 money is due or owing should be charged or credited to their respective 

 accounts. When these bills are settled, during the early part of the 

 following year, the entries should be made under bills payable or bills 

 receivable, as the case may be. 



In this book two pages facing each other are taken for each account. 

 The name of the account is written at the top of the page. The right- 

 hand page is marked "Credits" and is used only to record credits to 

 the account. The left-hand page is marked "Oiarges" and is used only 

 for charges against the account. The pages then appear as shown in 

 the sample account with a crop of potatoes (Table II). 



