12 FARM ACCOUNTING 



(d) Assuming that this figure represents the amount of cash 

 he received from the sale of the products mentioned, state how 

 that cash was probably used before the close of the year. For 

 this purpose refer to the figures in problems 7 and 8 which 

 indicate that he had only $200 more cash at the close than 

 at the beginning. 



REVIEW QUESTIONS 



1. What is bookkeeping? 



2. What is accounting? 



3. What are three of the essentials of a business transaction, 



from a bookkeeping viewpoint T 



4. Name three general reasons for wanting aggregate figures 



concerning business financial operations. 



5. What is a Resource? 



6. What is a Liability? 



7. What is Net Worth? 



8. In general what does a Statement of Resources and Lia- 



bilities contain? In what two general forms may it be 

 prepared ? 



9. Explain how Mr. Arnold can pay off Liabilities of $1000 



during the year and yet have his Resources at the close of 

 the year valued at the same figure as at the beginiiin.ir. 



10. What is the purpose of a Loss and (Jain Statement? What 



is its relation to a Statement of Resources and Liabili- 

 ties? 



11. What is it necessary to do during the year in order to have 



information available at the close of the year for a LOBS 

 and Gain Statement and a Statement of Resources and 

 Liabilities? 



12. What two main points are to be considered in keeping a 



record of business transactions during a year? 



13. Why are the Statements illustrated in this chapter shown with 



the year ending February 28, rather than December 31 ? 



