COST ACCOUNTING , 279 



and man labor, horse labor, feed and similar items in con- 

 nection with livestock. Indirect expenses are represented 

 by such items as depreciation, interest and general expense. 



Under a cost system, the so-called closing entries include 

 those made for the purpose of distributing the indirect 

 expenses over the productive elements. In addition, there 

 are other entries which are recorded only once a year, and 

 which form part of the process of closing, but which do 

 not involve indirect expenses. An example of this latter 

 class is the entry made at the close of each year debiting 

 Labor and crediting Household for the value of the family 

 labor. 



General Plan of Closing. At the close of the year after 

 completing the labor and feed records and recording the 

 debits and credits in the cash journal for the last transac- 

 tion of the last day of the fiscal year, the next step is to 

 find the net results to be shown by the mass of data col- 

 lected during the year. Such net results portray the 

 progress during the year as shown in the Loss and Gain 

 account, and the condition at the close of the year as shown 

 in the Statement of Resources and Liabilities. 



The general plan of assembling the costs in the proper 

 accounts in the ledger may be outlined as follows : 



1. Record labor of the family for the year. 



2. Take an inventory and record it in the Inventory 

 Record book. 



3. Charge interest on investment and depreciation over 

 the productive elements through the accounts Equipment 

 Expense, Building Expense and so on. At the same time, 

 interest on livestock is charged direct to the proper live- 

 stock accounts. 



4. Charge feed consumed during the year to the live- 

 stock. (This entry is posted from feed record.) 



5. Charge man labor and horse labor over the various 

 farm elements. 



