886 SUCCESSFUL FARMING 



considerable guessing is involved. The transfer of daily transactions to 

 the journal may be done at odd times. It is wise, however, to post at 

 frequent intervals in order to avoid work of tedious length. 



Time Required to Keep Accounts. — Farmers who have used the 

 system of farm accounts here outlined report the time consumed in making 

 daily entries to be from two to ten minutes, with an average of about five 

 minutes. To this must be added a number of hours at the close of the 

 year to close the accounts. This will vary with the size of the farm and 

 the complexity of the business. Much of this work can be done evenings 

 and on winter days when there is little to interfere. It is time most profit- 

 ably spent. 



Best Time to Start Accounts. — Farm accounts may be started any 

 time after the last crop is harvested in the fall and before the first crop 

 preparations are started in the spring. The exact date will vary with 

 location and type of farming. Usually January 1st, March 1st or April 1st 

 will be suitable dates. For the tenant farmer the date should correspond 

 with the termination of his lease. In all cases the date should be early 

 enough to enable the farmer to close his year's accounts and make his 

 plans for the new year before the rush of the season's work begins. 



Annual Inventory. — The time of making inventory should correspond 

 with the date of opening farm accounts. It is the most essential item in 

 the accounts. The inventory items should be the first entries in the 

 accounts with the various enterprises on the farm. For example, the 

 cow account should be charged at the beginning of the year by inventory 

 for the number and value of the cows; also the amount and value of cow 

 feed on hand. At the close of the year the accounts should be credited 

 with the number and value of cows and the amounts of feed on hand. 

 The purchase or sale of cows during the year may have materially increased 

 or diminished the value of the herd. The herd itself may have increased 

 in value because of the development of a number of heifers or decreased 

 because of a predominance of old cows. The inventory at the beginning 

 and close of the year shows the actual value of the herd, and is necessary 

 for an accurate account with it. 



The inventory should include the farm, the buildings, all stock and 

 equipment, cash crops and feed on hand, cash and money in bank, and 

 should also show accounts that are due. This gives the total assets. It 

 should likewise show notes that have been given and bills to be paid. 

 These represent the liabilities and when subtracted from the assets give 

 the true worth of the farmer. 



Values to Use. — In estimating values, the market price at the farm 

 or the price at the nearest selling points, less cost of hauling, should be 

 used. Hay in mow or stack and grain in bins may be closely estimated 

 by measurements. It is customary to allow a reasonable depreciation on 

 all machinery and implements, on buildings and on stock that is past 

 its prime. 



