SPECIAL ACCOUNTS AND ENTRIES 121 



The same principles govern mortgage notes. The lat- 

 ter are sometimes shown under separate accounts because 

 of the nature of the security accompanying the notes rather 

 than because of any material difference in the negotiable in- 

 struments themselves. 



Checks, bank drafts and money orders are considered 

 as cash, and are so entered when received or given. 



Land and Buildings. This account is sometimes used 

 to record transactions concerning land and buildings. 



In farm accounting, -as in most kinds of commercial 

 accounting, it is better to keep two accounts, one for land 

 and one for buildings. These may be subdivided to care 

 for different parcels of land or different buildings. 



Land. Land account is debited with the original cost of 

 % the land, if accounts are being kept at the time of pur- 

 chase. If books of account are opened after land is in 

 one 's possession, debit the account with a fair market value 

 of the land at the time of opening the books. Land in- 

 herited after the books of account are opened is charged 

 to the account at a fair market value at the time of in- 

 heritance. 



The account is also charged with any special assessments 

 levied (usually applying to city rather than rural prop- 

 erty), with any recording costs, attorney's fees or other 

 necessary expense up to the time title passes to the pur- 

 chaser. It is charged with cost of clearing, minus income 

 from timber ; 1 with the cost of any permanent improve- 

 ments as tiling, fencing, or dredging, except that annual 

 or periodical dredging in a stream should be charged to 

 General Expense. A new fence or "stretch" of tiling to 

 replace parts worn out should also be charged to General 



1 This does not mean that the cost of operating a lumber camp is 

 charged to Land account. It refers only to clearing on a small scale, 

 except that removal of stumps from a large deforested area would 

 be charged to land. 



