BOOKKEEPING BUSINESS TRANSACTIONS 8 



find the aggregate of his transactions for any particular 

 purpose. The most general reasons for one's wanting ag- 

 gregate figures concerning his business are: 



1. To show his true financial worth at any time. 



2. To show whether he is the possessor of more or less 

 wealth now than at some definite former time, and what 

 form this increase or decrease assumes. 



3. To show what elements have contributed to this in- 

 crease or decrease in wealth. 



Statement of Resources and Liabilities. The aggregate 

 of business transactions that shows the financial worth 

 on a given date is called a Statement of Resources and 

 Liabilities or Balance Sheet. It contains a list of the 

 Resources and a list of the Liabilities with the money 

 values of each indicated. 



A resource is anything of value owned ~by or owing to a 

 given individual. It is better defined as property or right 

 to property. For example, Mr. Arnold's resources of 

 $5000 might consist of cash $1000, horses $1600, cattle 

 $1100, and equipment valued at $800, all of which would 

 be classed as property, and a debt owing to him by Mr. Bell 

 for $500, which might be called Arnold 's right to property 

 in Bell's possession. At law this $500 owing from Bell is 

 considered as Personal property of the type known as 

 choses (things) in action. Resources are often called As- 

 sets. Some attempt has been made to distinguish between 

 the two terms, but they may be used interchangeably. 



A liability is an amount which is owed to someone. It 

 might be called the right of someone else to property of the 

 individual whose records show the liability. For example, 

 Mr. Arnold's liabilities of $1000 might consist of a mort- 

 gage on the equipment for $700 and a note payable to 

 the bank for $300, which Mr. Arnold is expected to pay 

 in 30 days. These are known as mortgages payable and 



