30 OUTLINES OF AGRICULTURAL ECONOMICS 



15. Is it important also that he discover the source of his profits 

 or losses ? Do production records show the source of gain or loss ? 

 its amount ? Do general accounts show amount of gain or loss ? its 

 source ? 



16. What is "cost accounting'' ? What records other than those 

 we have been considering will be needed in a system of cost accounts ? 



17. What are overhead charges and what difficulties do they pre- 

 sent in cost accounts ? How may these be met ? 



18. What principle should be followed in the charging for labor 

 or materials which are used in a particular enterprise but which would 

 not otherwise command any price ? 



19. Show how cost-accounting methods reveal the competitive or 

 non-competitive character of farm enterprises. How does this affect 

 the farmer's practice ? 



20. Is the value of cost accounting on the farm to be found in the 

 absolute figures obtained or in the comparative results (e.g., year with 

 year under changed methods, one crop with another, etc.) ? 



21. Does the manufacturer use "cost of production" figures in 

 such a way as to influence the making of prices ? Does the farmer 

 do so? 



PROBLEMS 



1. "It is probable that no other business followed for sole support 

 could long survive the lack of an accounting system; yet in spite of 

 this lack the farming business continues to prosper. ! ' Can you explain 

 why the situation with reference to farm accounts differs somewhat 

 from other industries? Is that difference becoming less today? 

 Why? 



2. "More farmers fail of financial success from a lack of business 

 methods and proper records than from ignorance in handling land, 

 plants, and animals, and in making them thrive." Do you agree? 

 Can you show certain particulars in which business methods are likely 

 to be improved as a direct result of the existence of a system of 

 accounts? Might some business blunders occur even on a farm 

 which had an admirable set of books? Is it conceivable that, if a 

 very elaborate set of books is undertaken, time may be spent upon 

 them which would be better employed in some active farm work ? 



3. "Many farmers have found a diary a helpful means of keeping 

 a fairly complete record of their farm buisness. With a little care and 

 thought the value of a diary for this purpose can be greatly increased. 

 With some extra pages in the back for the farm inventory and sum- 

 mary, this book can easily be used to keep financial records of the 

 farm business." Is such a system a happy mean between the slipshod 

 methods of the farm without any financial record and the one which 



