222 I A KM ACCOUNTING 



tion of data in the accounts which makes thr records much 

 more useful than under the single entry or purely statis- 

 tical system. All figures concerning a department of farm 

 operations are brought together under one heading in 

 the ledger where the net results of the operations of that 

 department can be found. Then the results of these sev- 

 eral departmental or productive accounts are brought to- 

 gether under one heading called I.ONS and (Jain account, 

 if they show either an expense or an income. The result 

 of all thcM- lilies and gains brought into the L<>-s ami 

 Gain account shows the net loss or gain for the period of 

 time under consideration. 



Some so-called nf farm accounting provide elab- 



orately ruled columns for various and multitudinous fig- 

 ures concerning costs of production, and income and other 

 facts, but they do not make provision for correlating these 

 results with other el >f cost and income.' In other 



words, the many variations of the single entry or statisti- 

 cal system provide for the collection of data without mak- 

 ing provision, at the same time, for the intelligent use of 

 such data. 



Purpose of a Cost System. The question should nat- 

 urally arise, ""Why do we keep cost records, including 

 those that show the cost of labor employed, and the cost 

 of grain consumed T" 



There are three main reasons for keeping cost records 

 and using the results in the ledger accounts as previously 

 indicated. 



(a) To find the profit from each productive element of 

 the farm after considering all cl of cost. 



(b) To present figures as a basis for constructive criti- 

 cism of the business, or of farming methods in use. 



(c) Theoretic filh/, to fi.r prices. 



Finding Profit of Each Productive Element. Analyzing 

 (a) above, brings out a well established principle in ac- 



