RECORDS AND ACCOUNTS 385 



self would bring in sufficient funds to give a prosperous appearance 

 to the farm. But a farm cannot properly be called successful unless 

 it pays a fair rate of interest on the investment, returns fair wages 

 for the farmer's labor, and maintains at the same time the fertility of 

 the soil. A better realization of the fact that the farm is a complex 

 business subject to certain economic laws is one of the greatest 

 benefits to be derived from such a study as is outlined in this 

 bulletin. 



Farmers already know that the gain from a big business should be 

 more than from a small one, that good cows are more profitable than 

 poor ones, and that good crops are more desirable than those which 

 do not pay for harvesting. The real difficulty is that the farmer has 

 had no convenient way of measuring just how good or how poor his 

 business really was, i.e., he has had no way of measuring its efficiency. 

 With the facts that are made available by such an analysis as is here 

 provided, he can more readily find the strong and the weak points in 

 his system of management and thus make improvements with some 

 confidence in the results. 



Many of the items to be recorded may appear to be rough esti- 

 mates, but those who undertake studies of this kind on a large scale 

 will be surprised to find how intimately most farmers know the 

 details of their business when it is analyzed into the elements that 

 correspond to the terms in which the farmer thinks when studying 

 his business. A farmer may not know offhand what his total farm 

 income is, but he does know with considerable -accuracy the facts 

 necessary to determine this income. It is important also to remem- 

 ber that the final result of the analysis of a farm business is deter- 

 mined mainly by a few large items which the farmer does know quite 

 accurately. Variations in the numerous small items are as likely to 

 be above as below the correct values and hence tend to balance 

 each other. A variation of a few dollars in the final result is not 

 a matter of great importance and would not seriously affect the 

 conclusions. 



The problem of farm accounting is not a question of a particular 

 kind of form or blank, but of knowing what accounts to keep and what 

 use to make of them. The method of farm analysis given in this 

 bulletin is that which has been used in the Office of Farm Manage- 

 ment for a number of years in the study of the business of farming. 

 A crop record and a live-stock record should be kept and summarized 

 in a form like that shown on pp. 386-88. 



