CHAPTER XXXIV 



THE FARM RECORD 

 By Hiram T. Scovill, A.B., C.P.A.* 



Necessity of keeping accounts. — '''Briefly stated, the object 

 in keeping books of account is to furnish the essential facts from 

 which one can find the financial condition of the business over a 

 given period of time. 



"-All data should be collected with a definite end in view. 



''-The farmer desires to make as much money as he can from 

 the time he puts in and the investment he has made. A desire 

 to make money is usually not sufficient. The desire must be 

 backed up by action. The action should be directed along proper 

 channels. The proper channels can be determined very largely 

 by an intelligent perusal and interpretation of the accounts prop- 

 erly kept with the aid of cost records. 



"^The assertion that farmers are making large profits is erro- 

 neous. They are living on the earnings of their investment and 

 not on the real profits of the farm. 



' ' "The ledger account is the starting point for all analyses and 

 comparisons of results." 



Keeping the accounts must precede the interpretation. Keep- 

 ing account of one's business affairs means the recording of 

 events in a systematic way as they arise. The systematic 

 method in use all over the country by commercial and industrial 

 concerns is desirable but not absolutely necessary on the farm. 

 It is desirable because (1) it enables one to find readily and 

 accurately the reason for the specific amount of loss or gain, 

 (2) it permits one to prove the work and thus avoid errors in 

 recording, (3) it affords an excellent opportunity for one to 

 check up on one's assets and liabilities, and (4) it makes it pos- 

 sible for one's heirs or successors to find out what the financial 

 situation is when occasion demands. 



Methods. — All records may be kept in one account book with 

 ledger ruling of about two hundred and fifty to three hundred 

 pages. Reserve the last twenty or thirty pages for the record- 



* Professor of Accountancy, University of Illinois, Urbana, Illinois. 

 ' Scovill's Farm Accounting, by D. Appleton & Co. 



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