904 THE FARMKRS HANDBOOK. 



SECTION" XV. 



Book-keeping for Farmers.* 



Farm accounts, to be really useful, are by no means easy to keep, inasmuch 

 as many of the entries must necessarily be estimates rather than statements 

 of actual transactions. The operations of each branch are so dovetailed into 

 those of others that it requires keen discrimination to ascertain the 

 percentage of profit or loss to be allocated to it. 



But however difficult book-keeping may appear, it should be remembered 

 that an actual knowledge of his financial standing is as important to 

 the farmer as the state of his crops. The conditions of agriculture have 

 changed; things are cut much finer, competition is keener, and details of 

 leakages must be watched far more closely than was necessary in the so-called 

 " good old days." This is an age when brain must supplement, if it does 

 not replace, brawn, and success is far more likely to attend the steps of 

 the farmer who does not neglect this important part of his operations. 



Reasons for Keeping Accounts. 



The following is a summary of the reasons for keeping accounts in a 

 business-like fashion: — 



L. It is our only way of knowing whether the farm it> being run at a 

 good profit, at a small profit, or at a loss. 



2. It enables profit or loss to be traced to a certain department of 



the business. The expenses may be too high, the five stock may 

 not be paying, a certain crop may be grown at a loss, or perhaps 

 one section is paying well and another is not, and there is no 

 indication where the leakage or the profit is. All these things 

 would be told by a set of books. 



3. It tends towards economy of expenditure by keeping the expense 



account continually in view, and may reveal to the farmer who is 

 discouraged because his " farm doesn't pay," the fact that it is 

 paying well, but the profits are all being consumed by extravagant 

 management or living expenses. 



4. it enables the elimination of the sources of loss by the abandonment or 



improvement of those branches which are being conducted without 

 profit, and the development of those branches that show the 

 greatest margin of profit. 



5. It makes a handy compendium of particulars — a diary, a memoran- 



dum, a reference as to dates and crops, profits and transactions — 

 which will be a source of much satisfaction and may become 

 important evidence in case of litigation, or may even prevent it by 

 furnishing indisputable proofs. 



*TliLs section has been revised by Mr. G. H. Johnston, Lecturer in Book-keeping 

 Hawkesbnry Agricultural College, who Ins added t lie portion headed "The Second 

 Year." The figures quoted are not to be regarded as estimates of costs ; they are only 

 used as illustrations. 



