CHAPTER 16 

 FARM RECORDS AND ACCOUNTS 



KINDS OF ACCOUNTS 



ACCOUNTING is usually concerned with keeping track of 

 who owes you and whom you owe. Probably these were 

 the tirst kinds of accounts that mankind learned to keep. 

 Such accounts avoid mistakes and disputes as to how much 

 one man owes another. They are necessary whenever much 

 business is done on credit. It is this kind of accounting 

 that is usually meant by the term ' ' bookkeeping. " It shows 

 the relation of the business to outside persons or firms, or 

 may be called external accounting, or personal accounting. 



Merchants who have a large amount of this kind of 

 accounting are likely to think that the farmer who does 

 not keep such accounts is very careless, but in many cases 

 the farmer does so little buying or selling on time that he 

 does not need to keep such accounts. 



262. Accounting as a means of studying the business. 

 - But the uses of accounting have now extended far be- 

 yond the mere recording of debits and credits. Men are 

 now beginning to keep careful cost accounts and other 

 records of the internal affairs of the business for the pur- 

 pose of learning how to conduct the business more effi- 

 ciently. These two kinds of accounting are entirely 

 different. One kind is a very simple matter of arithmetic. 

 Nearly any person who is accurate can make a good 

 " bookkeeper," but cost accounting is an investigation 

 into the internal organization and management of the 

 business. The keeping of such accounts involves a thor- 



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