FARM ACCOUNTING 



CHAPTER I 

 BOOKKEEPING AND BUSINESS TRANSACTIONS 



Accounting and Bookkeeping. The art of classifying 

 and recording business transactions and facts systemati- 

 cally is called bookkeeping. Accounting is that branch 

 of practical science which treats of the methods of classify- 

 ing and recording business transactions so that the facts 

 they exhibit shall be shown in their proper relations. 



It is seen from the definitions that bookkeeping and ac- 

 counting deal with the interpretation of business transac- 

 tions. 



Books of Account. Business transaction^ interpreted 

 according to accounting principles are recorded in a per- 

 manent written form in books of account. Such books 

 are usually ruled with horizontal lines in blue; and with 

 vertical lines in blue or red. The vertical rulings are made 

 to provide columns for recording values of transactions in 

 dollars and cents. 



In interpreting and recording a transaction, it is not 

 necessary that all the details be shown. It is expected, 

 however, that all the essential points will be shown. For 

 example, Mr. Arnold buys a horse of Mr. White, and pays 

 him $150 in cash. This is a business transaction. It might 

 be that the completion of the sale involves several offers 

 and counter offers, and several affirmative or negative state- 



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