VII. RECORDS AND ACCOUNTS AS MEASURES OF 

 EFFICIENT MANAGEMENT 



QUESTIONS 



i. What is the purpose of a system of accounts? Are financial 

 items the only ones which should be recorded ? Explain. 



2. What is the nature and purpose of "production records" on 

 a farm? 



3. Should the farmer take a financial measurement of his business 

 at stated intervals ? What is its purpose ? 



4. Why is a system of running accounts without periodic inven- 

 tory as likely to deceive the farmer as to enlighten him ? 



5. What difficulties are met with in making a satisfactory inven- 

 tory ? Is it true that the accountant starts out with certain figures 

 of his own making and that, no matter how accurate his method, the 

 results cannot be any more correct than the figures with which he 

 starts, or which he introduces at later stages ? 



6. Is it possible to secure units of valuation based upon a large 

 number of cases treated statistically ? 



7. What is depreciation ? appreciation ? What benefit should the 

 farmer derive from keeping a careful record of these items ? 



8. Should profits or losses due to changing values of the farm 

 property be kept separate from profits or losses from operation ? Do 

 you know of farmers who deceive themselves by not separating these 

 accounts ? 



9. The financial statement of the ordinary commercial enterprise 

 shows " resources and liabilities." What is meant by these terms? 

 by "net worth"? 



10. What would appear on the liability side of the farmer's finan- 

 cial statement ? If he has no outstanding obligations, would a sum- 

 mary statement of his inventory constitute his financial statement and 

 show his net worth ? 



n. How should records of current receipts and expenses be kept ? 

 What is a ledger ? May the farm accounts be kept in this book alone ? 



12. What is a journal ? a cash book ? 



13. Since the farmer wishes to use as few books as possible and 

 since his transactions are usually neither numerous nor complicated, 

 what book or books should he use ? Why ? 



14. If one is to get the greatest benefit from the keeping of 

 accounts, what comparisons does he need to make besides the com- 

 parison of his own financial situation from year to year ? 



29 



