266 FARM ACCOUNTING 



at any time during the year. Such exp< -n^ -s nf mainte- 

 nance are ultimately charged to the farm elements through 

 the yearly Horse Labor Summary. 



Other Horses are kept primarily for the purpose of mak- 

 ing a profit from their sale. Other Horses account is 

 charged with the cost 6f keeping horses that are not r; 

 as work animals. Expenses charged to Other Horses are 

 absorbed at the time of sale; if not, the account shows a 

 loss. A profit results when the sale price of, or other in- 

 come from Other Horses exceeds the cost of raising or 

 maintaining them after considering the inventories at the 

 beginning and close of the year. The balance of the ac- 

 count with Other Horses is closed into Loss and Gain 

 account. 



Deferred Charges. There is a class of inventory used 

 in cost accounting which does not represent specific units 

 of property that can be enumerated. The items in this 

 class, however, are inventories in the sense that they are 

 "sold" from one period to the next. They are better 

 known as "deferred char 



An example of such a d'-tVrn-d chanr-' i< fertilizer ap- 

 plied to a field and charged to it on the books. If the 

 entire cost of the fertilizer were considered as an expense 

 of that field or crop in the year in which it is applied, 

 the current year's crop would be charged with something 

 it did not use. For the same reason the following year's 

 crop would get the use of something for which it would not 

 be charged. In order to place the charges where they be- 

 long, the value of fertilizer unexhausted at the close of 

 the year is determined with reasonable accuracy and 

 "sold" to next year's crop. The "sale" is recorded in 

 the same way as the inventories of livestock, namely, a 

 credit above the double lines and a debit below. 



Other common deferred charges are interest or insurance 

 premiums paid in advance. For the average farmer the 



