348 FARM ACCOUNTING 



an entry has been made, one may know that the account 

 provides for $600 for the labor of the operator whether he 

 be a tenant or owner. 



Income from Investment: The income from the invest- 

 ment in farm property is very easily determined from 

 such a Loss and Gain account. The $305 is the interest on 

 the investment in equipment and livestock, assuming that 

 the operator in question is a tenant. If he is a landlord, 

 it would include interest on land and buildings also. 



Income as a manager: "With the $600 labor, and the 

 proper amount of interest on investment already charged 

 to the various productive elements the compensation for 

 risk and management is $12!)5 (1400+200305). The $305 

 is deducted because it is considered as an income of the in- 

 dividual which is not afi'ected by the managing ability of 

 the operator, and which does not measure any risk since 

 it is charged to the productive elements regardless of all 

 other conditions. 



The $.'{0.") interest in this case and in other similar cases 

 might be credited to Household account. Since it is cred- 

 ited to a separate account, Interest on Investment, it may 

 be considered for analytical purposes as part of the House- 

 hold credits. 



Analysis and Comparison of Results. Analyzing ledger 

 accounts and framing suitable comparisons therefrom con- 

 st it ute two of the most valuable points of assistance in the 

 interpretation of accounting results. The preparation of 

 analytical and comparative tables involves a knowledge of 

 statistical as well as accounting methofls. 



The term "cost records'' is not confined to the forms and 

 methods used in collecting the information concerning the 

 inter related farm elements. It is used also to designate 

 any tables and analyses that might be prepared to assist 

 in interpreting the data and the various accounts. Such 

 records are the most important part of a cost accounting 



