1 >o FARM ACCOUNTING 



the close of the period, is transferred to Loss and Gain 

 account. 



Household. The Household account is one of the first 

 ones that should be established in any system of farm 

 accounts. This does not necessarily mean that it is the 

 first one to be studied. This account conlains all transac- 

 tions involving the personal affairs of the farmer and his 

 family as opposed to the other accounts which relate to 

 his operations as a farmer. 



Household account has no parallel in commercial ac- 

 counting. It might arise in commercial accounting, if the 

 doctor, the lawyer, or the merchant recorded his expenses 

 for groceries, clothes, amusements and similar items among 

 his business expenses. In case of the doctor, he records 

 his expenses and fees in a set of books at the office. At 

 the close of the year he finds from the Loss and Gain ac- 

 count how much he has made as a doctor. If it is *:><),000, 

 for example, it is considered that he has made a success in 

 his profession. 



Had the doctor recorded all expenses of maintaining his 

 house in the set of books at the office, results might have 

 been different. 1 iple, suppose his family had lots 



of clothes, entertained lavishly and took vacations at a 

 fashionable summer or winter resort, as a result of which 

 the Loss and Gain account of the doctor's office books 

 showed a loss of $1000 at the close of the year. It might 

 lead to false conclusions if one did not stop to analyze the 

 situation. 



It might lead to the conclusion that he was not a suc- 

 cessful physician. The facts, when known, however, are 

 that he was a good physician, from a business point of 

 view at least ; but the standard of living of his family did 

 not permit him as an individual to be any better off at the 

 close of the year than at the beginning, in spite of his 

 earnings in his profession. 



