COST ACCOUNTING 333 



19. Describe the operation of the Rent Adjustment account. 



Why is such operation justified? 



20. Should the cost of production vary with the selling price of 



commodities produced ? Why ? 



21. When is the Equipment Expense account debited? 



22. How is Equipment Expense distributed over the several 



farm elements? State both the theory and the method. 



23. Why is it important to post all debits and credits arising 



from horse labor before effecting a distribution of Equip- 

 ment Expense in the horse labor summary? 



24. What distinction is sometimes necessary in the accounts in 



order to keep the transactions with work horses separate 

 from other horses? Why is such distinction made? 



25. What are deferred charges? How are they shown in the 



accounts ? 



26. How is manure handled in the accounts when hauled from 



the barnyard to the fields? 



27. Is all of the manure applied to a field in a given year con- 



sidered as a cost of producing the next crop therein? 

 How are the accounts made to show the correct state of 

 affairs in this respect? 



28. What treatment is advocated for losses and gains of an 



extraordinary nature? 



29. Why is interest considered as an element of cost? Under 



what conditions would it not be necessary to consider it 

 as such? 



30. The practice of considering interest as an element of cost 



has what effect on the net loss or gain as an individual as 

 shown by the Loss and Gain account? What effect does 

 it have on the net loss or gain of any specific produc- 

 tive element? What effect on the income as a farmer? 

 What effect on the income due to management? 



31. What entry is made for interest on land? Interest on 



buildings? Interest on livestock? Interest on equip- 

 ment? At what time of the year are each of the entries 

 made for Interest on Investment? 



32. Compare charges for rent on the books of a tenant with 



