FARM RECORDS AND ACCOUNTS 429 



ough knowledge of the business. The interpretation of the 

 results and their application in the reorganization of the 

 business call for the highest type of business ability. 

 These two kinds of accounts are commonly confused. 

 The statement is frequently made that the farmer ought 

 to keep accounts as the merchant does, and that he ought 

 to know how much his wheat costs and whether his cows 

 pay. Such statements confuse bookkeeping and cost 

 accounting. The merchants keep personal accounts, but 

 these are nothing like cost accounts. Farmers probably 

 keep personal accounts as well as city persons who have the 

 same amount of such accounting to do. The chief reason 

 why they do so little bookkeeping is because they have so 

 little to do. A study of this question in one county showed 

 that 47 per cent of the farmers kept some accounts of re- 

 ceipts and expenses. In this same county, there were two 

 farmers who kept accurate cost accounts. Much over half 

 of the population lived in cities and villages, but few if 

 any of the city business men keep cost accounts. The 

 fact is that cost accounting is used by very few persons 

 in city or country, but this method of studying the busi- 

 ness is rapidly increasing. 



There is very little relationship between bookkeeping 

 and cost accounting. Bookkeeping is an exact science. 

 If John Jones buys 100 pounds of sugar at 6 cents, and has 

 it charged, the account is exactly $6. There can be no 

 other answer. But cost accounting contains estimates. 

 Two persons studying the same business will not have ex- 

 actly the same results, although the results ought to point 

 to the same recommendations for the future management. 

 A railroad cannot determine what it costs to haul freight. 

 By cost accounting methods, it can arrive at an approxi- 

 mation of the cost. - How reliable the result is depends 



