2 FARM ACCOUNTING 



ments concerning the qualities of the horse. From the 

 bookkeeping and accounting point of view what are the 

 essentials and what are the non-essentials of this transac- 

 tion? Which facts concerning the transaction are to be 

 interpreted and which are not to be interpreted in the 

 books of account of Mr. Arnold? 



The Essentials of a Transaction. One of the most es- 

 sential elements of the transaction in question is the value, 

 in this case $150. Another is the form in which the value 

 was measured, namely, horse and cash. In a correct in- 

 terpretation of the transaction mentioned, then, we should 

 at least show that cash and a horse were involved to the 

 extent of $150. We should record the date on which the 

 transaction occurred. We might find it desirable al><> 

 to show the name of Mr. White, and also the specific name 

 of the horse for future reference. Our interpretation on 

 the books of account need not state anything concerning 

 the offers and counter offers nor the statements made 

 concerning the qualities of the animal. They are con- 

 sidered as non-essentials for the purpose of bookkeeping 

 records. 



The exact form that this interpretation of the transac- 

 tion should assume on the books of account will be discussed 

 when we have investigated the use to be made of the trans- 

 actions after they are recorded. 



The Use of Accounting Information. If a man could 

 remember all of his business transactions during a year 

 and the values concerned, he would not need to keep any 

 written record of them, unless it might be for the bene- 

 fit of those who succeeded him, or for comparison of 

 one year's results with another. 



It is quite natural, then, from our knowledge of the 

 memory possessed by the average man, to assume that one 

 who indulges in business transactions should keep a rec- 

 ord of them, if he wishes to classify them in any way or 



