HOW TO KEEP FARM ACCOUNTS. 



BUILDING AND IMPKOVEMENTS. 



129. "The rule of law is, and for centuries has been, that 

 whosoever owns land owns all there is above it and alh there ia 

 below it. Naturally then, when bujiug or selling farms all, 

 buildings and everything fairl.v belonging to them go i*ith the 

 farm. In general, whatever the owner of the farm fastens to the 

 ground or to a building is a fixture and he sells it when he sells 

 the farm." — Parson's Laws of Business. 



Therefore, after a farm is imi)roved, having good fences, is 

 well tiled, and with satisfactory buildings, the small annual ex- 

 penditures to maintain the farmstead might as well be charged to 

 "pjxpense" unless there is some specific reason fur doing other- 

 wise. 



But if your farm is unimproved and a new house, barn, fences 

 and tiling is needed or anticipated, an account should be opened 

 for "Building and Improvements" and all money paid for such 

 items should be charged to it. Then at the end of the year when 

 the books are closed this account should be credite<l "By In- 

 ventory" for the sum total of the debit side of the account, less 

 a certain percentage, say ten, which should be charged to the 

 "Loss and Gain" account each year for depreciation. By doing 

 this the first cost of building and improvements, which, of course, 

 will con.stantly depreciate, is distributed equally for a period of 

 years. 



If I'ox. in the illustr;ilioii giv<'n herein, had had a "Building 

 and Improvements" account, the proper entry for the Stock Scales 

 he bought July 22d (Plate 21, item cb) would have been to charge 

 them to that account instead of "Expense," but as his farm is im- 

 proved, it is better in such cases to call items a loss at once than to 

 open an account on purpose for IJiem. However, this is a matter 

 of opinion, and the disposition of such items must be decided by 

 the owner of the farm'. 



When you have a "Building and Improvements" account you 

 should debit and credit as follows: 



100 



