4 FARM ACCOUNTING 



notes payable respectively. Both of these represent the 

 right of someone else to property of Mr. Arnold. 



The difference between the amounts of the resources and 

 liabilities is the financial worth or net worth of the indi- 

 vidual or organized business. Net Worth is sometimes bet- 

 ter known as Capital or Net Capital. In the cas<- just cited, 

 Mr. Arnold with resources of $5000 and liabilities of $1000 

 would have a net worth or capital of $4000 ($50001000). 



His statement of Resources and Liabilities would appear 

 as in Illustration 1 at the time his resources and liabilities 

 bore the values mentioned. 



ILLUSTRATION 1 



STATEMENT OF RESOURCES AND LIABILITIES 

 FEBRUARY 29, 1916 MR. ARNOLD 



Resources 



Cash $1,000 



Owing by Mr. Bell 500 



Horses 1,600 



Cattle 1,100 



Equipment MX) 



Total Resources ! $5,000 



Liabilities 



Mortgage payable $700 



Note payable 300 



Total Liabilities 1,000 



Net Resources $4,000 



(Net Worth or Mr. Arnold's Net Capital) . 



The statement is sometimes presented in another form, as 

 in Illustration 2. 



