234 FARM ACCOUNTING 



It is obvious from the nature of the account that it 

 would be in balance at the close of any year, if we worked 

 for our neighbors just as many hours with a man and 

 team as they worked for us. If we worked more hours, 

 the account would have a debit balance. If we worked 

 Lea hours, it would have a credit balance. 



Exchange Labor Balance. This brings up an important 

 feature of this account. Ordinarily, if we charge someone 

 for services and do not get full pay in return, we consider 

 the debit balance in such an account as a resource. In 

 tliis case it is not a resource, because we do not expect 

 to collect it, under the usual working agreements existing 

 among farmers. 



The balance of Exchange Labor account is an expense or 

 an income depending on whether it is a debit or credit 

 .lively. Any balance remaining in the account at 

 the time of closing the books for the year, is dosr,! into 

 General Expense account. A debit balance of the Exchann'" 

 Labor account is rl an expense in tJmt it repre- 



sents a donation to our neighbors. A credit balance is con- 

 sidered as an income or negative expense and is credited 

 to General Expense account because it is an item that tends 

 to reduce the farm expenses. 



The disposition of the balance of the account is the ele- 

 ment that gives it its name. It might be called "neigh- 

 bors*' account, except for the fact that the balance of the 

 account with such a title should be considered as a resource 

 or liability AVith the title "Exchange Labor," it is ap- 

 parent that its balance is an expense or income. 



The account as described above is seen to be one that 

 shows in the aggregate the relation between the amount 

 of labor given and received in exchange with the neigh- 

 bors. Its purpose is served at the end of a year if it en- 

 ables the farmer to form opinions and policies as to the 

 exchange of labor in succeeding years. It does not show 



