9] l 



THE FARMERS HANDBOOK. 



The trial balance is of great assistance in detecting mistakes in posting, 

 such as taking 6 for 0, 7 for 1, 3 for 5, and vice versa. Another commou 

 error is to place the figures in the wrong money column, making 5s. 7d . 

 appear as £5 7s. 



In actual practice the Journal is not totalled, and the trial balance is made 

 up by stating only the differences between the various accounts. This 

 would then appear as follows, and the method can be recommended when a 

 j£a : r amount of proficiency has been sained. 



Trial Balance by Difference. 

 Dr. Cr. 



£ s. d. £ s. .1. 



£1,210 



£1.210 



In the above example, very little time is saved, owing to its extreme 

 simplicity, but where numerous accounts, many of which have been balanced 

 •off, are concerned, the economv in labour is considerable. 



Closing the Accounts. 



The posting into the ledger having been proved correct, we now proceed 

 to close the accounts. 



Leaving the Capital Account for the time being, we find that £1,110 

 has been received by the Bank Account, and £750 paid out, leaving a Cr. 

 balance of £360. This is inserted, both sides totalled and ruled off, as seen 

 from the entries in italics. 



In the Horse Account, the valuation £140, or our estimate of what they are 

 worth at the end of the year, is entered a3 a Cr. balance, and the difference 

 between their original price and present value (£10) is carried to a Profit 

 and Loss Account, as being the cost of using the horses throughout the year. 



The Stock Account shows that £400 was paid for them. £300 worth has 

 been sold, and £300 worth remains on hand ; consequently a profit of £200 

 has been made, and to balance the account this amount is debited. 



The other entries are treated in similar fashion, all cash, stock, crops, <fec. 

 on hand, and all amounts owing to or by the owner being carried to a 

 Balance-sheet, and any differences to a Profit and Loss Account. . In the 

 case of wages, rent, and interest, it is clearly seen that they are losses in 

 themselves, although contributing to the net gain. 



