346 FARM ACCOUNTING 



the aggregate profit of the individual as shown in the ! 

 and Gain account. 1 In any particular crop account 

 absence of a charge for inter ",t on investment will result 

 in less cost and, therefore, greater profit than when int 

 is included as an element of cost. 



In brief, it can be said, then, that a comparison of costs 

 or profits is of little or no ml, nnl<ss tin < W.s or profits 

 to be compared are deter >n i < d under the same gem ml 

 principles. Great care must be exercisl in framing pol- 

 based on a "cost" or a "profit" </not<d by someone 

 else. 



Reading a Loss and Gain Account. Before attempting 

 to analy/.e the several productive acronnls one should un- 

 derstand first how to analy/.e the Loss and Cain aeenunt. 

 He should learn to know just what the Loss and Cain ac- 

 count tells about his business, his income from investment, 

 income as a manager, income as a laborer and income as 

 a farmer and an individual. 



It has been pointed out previously 2 how to find the 

 profit as an individual and as a farmer, by considering tin- 

 balance of the Loss and Gain account in connection with 

 the loss or gain transferred from the Household account. 



Considering the Loss and Gain account of Illustration 

 62 one should read the results in some such way as this: 



Income as an individual: The $1400 is the income as an 

 individual since all of the operations of the farm and 

 hoiiM-hold are considered in deriving the amount. 



Income as a fanner: $1 _!!>') is the income as a farmer 

 shown by the Loss and Cain account in Illustration H'J. 

 The amount is found by adding together the net gain of 

 each of the productive elements of the farm, oats, corn, 

 potatoes, swine and cattle. Interest on Investment is not 

 an income of the fanner but of the individual. Interest 



1 Illustrations 54 and 55. 

 "Pages 195-197. 



