284 FARM ACCOUNTING 



of the same account after the latter is ruled off. The same 

 is true of the Household and Horses accounts. (Any ex- 

 traordinary expenses or incomes which are to be carried 

 direct to Loss and Gain account are closed into it at this 

 time. Fire Loss and commission as agent are illustrations.) 



18. The net balance of Loss and Gain account should be , 

 transferred to the Proprietor's Capital account or to the 

 Partners' Capital accounts as the conditions require. 1 



19. Rule off the Capital account and bring down the net 

 balance. 



20. Take a Trial Balance after Closing, to test the 

 accuracy of the closing process. Incidentally, it shows the 

 resources and liabilities of the business at the close of the 

 year, including the proprietorship. 



Modifications of Cost System. The operation of a cost 

 system as outlined in this and the preceding chapter is 

 simpler in some details than would be advocated for the 

 most accurate results on a large farm or for some experi- 

 mental purposes. However, there are occasions when a 

 farmer might feel the need of a fair distribution of costs 

 over the productive elements without keeping even such 

 detailed records as have been described herein. 



It may be said that a farmer feeling unable to keep his 

 accounts in a way exactly as presented in the two chap- 

 ters on Cost Accounting -should at least try to keep ac- 

 counts that will show in a general way the relative results 

 of the several productive elements of the farm. In doinjr 

 this the farmer should use the same general principles but 

 use more estimates than are used in the system studied up 

 to this point. In other words, he should keep accounts with 

 the household and each productive element, and such other 

 accounts as are needed. He should charge each productive 

 element with some amount to represent labor, horse labor, 



1 See ' ' Loss and Gain account, ' ' pages 44-48, and ' * Closing Entries 

 of Partnership," pages 185-186. 



