BOOKKEEPING BUSINESS TRANSACTIONS 7 



shown in money values, namely to show what elements 

 have contributed to this increase or decrease in wealth. 



Loss and Gain Statement. If Mr. Arnold had kept 

 records in only a comparatively brief form, we might be 

 able to present some aggregate figures to show how the 

 $1000 increase arose. We should prepare for this purpose 

 a Loss and Gain Statement from the figures at our dis- 

 posal in Mr. Arnold's records. Such a statement would 

 show the expenses incurred in running the farm and the 

 incomes derived from the sale of farm products. We 

 shall assume in this case, that Mr. Arnold's records con- 

 tained sufficient information for the preparation of a 

 Loss and Gain Statement as in Illustration 4. The State- 

 ment of Resources and Liabilities and the Loss and Gain 

 Statement when used collectively are known as Financial 

 Statements. 



ILLUSTRATION 4 



Loss AND GAIN STATEMENT PREPARED FROM IMAGINARY DATA 

 FOR THE YEAR ENDING FEBRUARY 28, 1917 MR. ARNOLD 



Expenses and Losses 



Rent $400 



Labor 300 



General expenses 300 



Balance, gain for the yr. 1,000 



Incomes and Gains 



Milk Sold $300 



Corn Sold 1,200 



Oats Sold 400 



Miscellaneous income . 100 



$2,000 



$2,000 



Analysis of the Financial Statements. The brief an- 

 alytical statement presented in Illustration 4 shows, in a 

 general way, how Mr. Arnold was enabled to pay off his 

 mortgage and bank loan amounting to $1000, without per- 

 manently decreasing his resources to do it. He sold milk 

 for $300, corn for $1200, oats for $400, and miscellaneous 

 products (probably fruit and garden truck) for $100, mak- 



