lo May, 1909.] Book-keeping for Farmers. 



BOOK-KEEPING FOR FARMERS. 



11'. Mclvcr, .•1./..4.T., A.S.A.A. Eng., Accountcmt Small Holdings, 

 Croioi Lands Department , Melbourne. 



The advantages of keeping books of account are so obvious and have 

 been so often explained at length in the various text-books on the subject 

 that it is considered unnecessary to refer to them. 



I have endeavoured in this short paper to devise a method which will 

 enable the farmer by as few records as possible, made in a simple way, 

 to ascertain not only the state of his affairs and his profits or losses as a 

 whole but also the profits or losses made on the different branches of his 

 business. 



For the purposes of economy in time and labour all unnecessary 

 books have been dispensed with, one book being used for nearly all the 

 records. The arrangement of the accounts, as will be seen from the 

 example, shows that the usual practice has not been followed. A simple 

 extension of the amounts into their proper columns obviates the necessity 

 of keeping a separate ledger and posting the amounts to different accounts 

 therein. 



In commencing his records for the year, the farmer should prepare a 

 balance-sheet as shown in Statement " A." This is done by setting out 

 the value of all his assets on the one side and all his liabilities on the 

 other. The excess of assets over liabilities will represent his capital or 

 what he is really worth if his estate were realized. This excess or capital 

 is entered on the liabilities side of the balance-sheet making the total of the 

 two sides equal. The balance-sheet is then complete. If, however, his 

 liabilities exceed his assets he has no capital in the business. The assets 

 may briefly be described as his property and the liabilities as the debts 

 which he has to pay. 



If, at the end of the year, the farmer were to re-value all his property 

 and again estimate all his debts, he could bv making another balance-sheet 

 in the same way see to what extent his capital had increased or decreased, 

 or in other words, what has been his profit or loss on his business as a 

 whole. If the difference between the value of his assets and the amount 

 of his liabilities has increased, he has made a profit corresponding to such 

 increase, but if it has decreased he has made a loss corresponding to such 

 decrease. That is, provided he has not withdrawn any money or goods 

 from the business for his private use. If he has done so, then the value 



459.5. L 



