124, FARM ACCOUNTING 



accounts known as mixed accounts has received much jus 

 tilled criticism when used in commercial accounting. The 

 most prominent account of this nature in trading concerns 

 is merchandise. It is called a mixed account, becau- 

 does not come under any of the other classes, but is a 

 combination of several. It doefl not show a resource, an 

 expense or an income exclusively, but contains entries rep- 

 resenting resources, expenses and incomes all together. 

 The Merchandise account is debited with the value of 

 the goods on hand at the beginning of the period, with the 

 cost of goods purchased, with freight and drayage on 

 goods purchased, and is credited with the selling price of 

 roods and \\ith the inventory of goods on hand at the 

 close of the period. Any pun-liases or sales returned are 

 a No credited OF debit- d rwpecthrelj to thr merchandise 

 account. After making entries as noted, any credit bal- 

 ance remaining in the account indicates a ^.TOSS profit, any 

 deliit halance represents a gross lo^. 



The criticism of the account is l.a-.-d on tin- fact that 

 it must he analy/ed in order to show correct results. The 

 total credits cannot be taken as sales, for some of the 

 credits are usually for purchases returned at cost price. 

 Likewise the total debits do not usually show the pur- 

 chases because some of the dehits are at sale price repre- 

 senting returned sales. 



In place of the Merchandise account several accounts 

 are used as subdivisions of the account as follows: Pur- 

 chases, Sales, Returned Purchases. Returned Sales. Inven- 

 tory, Freight and Drayage-In. At the close of a fiscal 

 period these several account balances are brought together 

 into a Trading account to find the net result. 



Mixed Accounts on the Farm. In farm accounting 

 the mired account cannot be condemned to the e jrt< nt that 

 it in in commercial accounting for four reasons, (a) The 

 work of keeping extra accounts in place of the mixed ac- 



