74 FARM ACCOUNTING 



as expenses or resources and all credit balances as inf 

 or liabilities. 



Using the items of Illustration 15, the Loss and Gain 

 Statement contains on the left or debit side all those debit 

 balances marked "E," and on the credit side all t host- 

 balances marked "I" as in Illustration 16. The balance 

 is placed on the smaller side, in this case the debit side, 

 in order to make the two sides equal. The balance is a 

 gain because incomes exceed expenses. 



ILLUSTRATION 16 



Loss AND GAIN STATEMENT PREPARED FROM A TRIAL BAI 

 Loss AND GAIN STATEMENT FOR THB YEAR ENDED FEB. 28, 

 1917, MR. ARNOLD 



Rent $400 



Labor 300 



General Expense 300 



Balance, net gain 1000 



$2000 



Milk $300 



Corn rjoo 



Oats 400 



Miscellaneous Inc 100 



$2000 



The Statement of Resources and Liabilities as shown in 

 Illustration 17 contains on the left or resource side all 

 those debit balances marked "R" and on the right or 

 liability side, all those balances marked "L." 



Relation Between Trial Balance and Financial State- 

 ments. A further study of the trial balance in Illustration 

 15 in its relation to the Loss and Gain Statement and 

 Statement of Resources and Liabilities in Illustrations 16 

 and 17, respectively, presents additional points in account- 

 ing. All the items on the debit side of the trial balance 

 are placed on the debit side of one of the statements. All 

 items on the credit side of the trial balance are placed on 



