HOIV TO KEEP FARM ACCOUNTS. 



Day Book or Journal. Then by combining if with tlie Ledger, as 

 explained later on, the farmer will have to keep but one book of 

 record which will apjieal to all practical men. One volume a 

 year — the original book of entry and Ledger, one and the same. 

 In cases of dis])ute or litigation, if called upon to act as Guardian 

 or Administrator, if ever under any circumstances called upon 

 to produce the book in court, every transa(;tion is there convenient 

 and complete. 



21. ACCOUNT. — An account is a recorded statement of 

 debits and credits, of receipts and expenditures, or of business 

 transactions, and are of three kinds. Real, Keprosentative and 

 Personal. 



22. \li:\l. ACCOUNTS are those which show either a re- 

 source or a liability in continuous record, sucli as cash, uotes and 

 personal accounts. 



23. KEPRESENTATIVE ACCOUNTS are those which 

 show the earning activities of a business, such as interest, dis- 

 count, expense and property. 



24. PERSONAL ACCOUNTS are those opened with per- 

 sons who from time to time become indebted to us or we to them. 



25. LAWS OF DERIT AND CREDIT.— As explained in 

 defining double entry Bookkeeping, every transaction is made to 

 appear in the Ledger as both Debtor and Creditor, hence every 

 account is affected in two ways — by debits and crcnlits. From 

 this you will understand every account has two sides, the Debit 

 and the Credit. The prin(ii)Ies which govern thcin aic unchange- 

 able and are as follows: 



DEBIT SIDE 



ACCOUNX 



CREDIT SIDE 



On this side we enter what comes into 

 the business or what costs value. 



On this side we enter what gois out 

 of the business or what produces value. 



Therefore, you should memorize the following: 



Always debit what we receive and 

 who or what costs us value. 



Always credit what we give and who 

 or what produces value. 



You must thoroughly understand that every transaction that 

 can possibly occur is governed in a bookkeeping sense by one or 

 the other of the two principles given above. 



33 



