CHAPTER X 

 INTERPRETATION OF COST ACCOUNTS 



Importance of Correct Interpretation. It is an old say- 

 ing that "Figures do not lie, but liars figure." This would 

 be more in accordance with facts. if it read, "Figures do 

 not lie, but their interpreters are inclined to make them 

 lie." 



A large group of figures assembled during the course 

 of a year's operations on a farm may be made to tell a 

 great many different things about the farm 's condition and 

 progress in general or in detail. What they tell depends 

 largely upon the way they are analyzed, correlated and 

 studied; and upon the degree of accounting intelligence 

 used in such analysis, correlation or study. 



Under the preliminary discussion of cost accounting, one 

 of the purposes of a cost system was given as the forming 

 of a basis of constructive criticism. This is undoubtedly 

 one of the greatest benefits to be derived from the keeping 

 of cost records. It takes time and patience to keep cost 

 records. Unless some intelligent use is made of the records 

 and accounts, the time might be considered as wasted. If 

 the accounts and records are studied carefully, the time 

 used in keeping them is very profitably spent. One can 

 usually find a means of reducing expenses or increasing 

 production in one way or another if he studies his cost 

 accounts carefully. 



The benefits of a proper study and interpretation of 

 farm records is very nicely summarized by Mr. E. L. Cur- 

 rier, Assistant in Farm Management, Montana Agricul- 



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