44 The Farmer's Business Handbook 



introducing his name is to indicate who shod the 

 horses, which fact may some time be of value. 

 An explanatory word at the end of an entry is 

 often valuable, but should not be confounded 

 with the principals in the transaction. 



The Cash Account sometimes confuses the be- 

 ginner. If Cash is personified, or the money is 

 thought of as all being kept in one drawer, the 

 cash account may be the better understood. If 

 the money is put in the cash drawer, the drawer 

 (Cash) is debited, since it receives value ; if 

 money is taken out of the drawer then the drawer 

 (Cash) receives credit, since it parts with value. 



At the end of the year all open book accounts 

 should be balanced (although the debit and credit 

 balances may not be paid at the time) , for this is 

 the only way of determining how much is receiv- 

 able and how much payable on book accounts. 



For convenience, the farmer may open an ac- 

 count with Bills Payable, and under it record, 

 either during the year or at the end of the year, 

 all ))il]s, notes and interest accrued to date, closed 

 book accounts and other evidences of his indebted- 

 ness (except the mortgage on the farm, if there 

 be one) on the debit side. 



He may also open an account with Bills Re- 

 ceivable. Under this head he records, on the 

 credit side, promissory notes and accrued interest 

 thereon, bills receivable and amounts on the 



