480 FA KM MANAGEMENT 



The gain or loss as shown by the inventory should be the 

 same as that shown by the sum of the gains or losses of the 

 separate accounts. If one is doing a good farm business, 

 an error of $25 or $50 or so in a year need not bother him, 

 because it is most likely made up of small items that were 

 omitted from the personal expenses. It is not likely that 

 it would change his conclusions on any farm enterprise. 



The writer kept farm accounts by double entry methods 

 for three years, and for three years has used the method 

 here recommended. The omission of the cash account and 

 the freedom from attempts to make the accounts balance 

 saves half the work and nearly all the worry. At the end 

 of the year, the error is not serious enough to cause any 

 wrong conclusions as to how to reorganize the business. 

 He would not think of going back to double entry methods. 

 This method is now being used by a considerable number 

 of farmers with good results. 



Some farmers go one step farther and omit all personal 

 expenses. At the end of the year, the summary of gains 

 and losses will then show a greater gain than actually 

 occurred. The inventory will show the real gain. The 

 difference is the personal expenses. The writer believes 

 that personal expenses, as well as business expenses, should 

 be studied, and so favors keeping such an account. 



If one is managing a farm for another, he must, of 

 course, keep a cash account and keep it accurately, in 

 order to give an account of the money. The same is true if 

 one is renting land and shares receipts and expenses with 

 the landlord. 



286. Index. Tape fastened to the pages and marked 

 with the name of the account makes the work of listing 

 accounts very much less. A box of gummed tape that 

 costs 10 cents will be enough to last for many years, or 



