1920.] Farm Accounts, Profits, and Costs. 



163 



and by the farm are not taken into account, nor differences 

 in the amount of the valuation at the beginning and end of 

 the year. 



Most of the above objections apply equally if the kind of 

 account relied on is one of cash receipts and payments only, 

 without a valuation and without regard to the amounts owing. 



A simple method of book-keeping for small or medium-sized 

 farms is to use a Cash Book with several analysis columns 

 on either side, and a farm diary. This method will enable the 

 farmer to keep the private transactions separate, to account 

 for all the monies he receives, and to verify the correctness 

 of his Cash Book with the Bank Pass Book. At the end of the 

 year the totals of the various analysis columns of the cash 

 book are the foundation of his annual statement of account, 

 in which will be entered the amounts owing to and by the farm 

 at the end of the year, and the amount of the Inventory and 

 Valuation. This plan is the simplest that will give efficient 

 results ; in some cases, including the larger farms, more 

 books will be necessary. 



Advantagres. — In all cases accounts are a valuable source 

 of information, and in most cases they save money. One of 

 the main objects in keeping accounts is that the farmer may 

 know at regular intervals how he stands, and to what extent 

 his farm is paying. Knowledge of the facts is the first step 

 towards economy, and the proper control of expenses and of 

 the whole financial side of the farm business. 



The expenses of the farm can be divided into as many 

 headings as is desired and a watch kept on each expense with 

 a view to economy. The various sources of income can be 

 similarly classified, and useful comparisons made from year 

 to year. 



Proper accounts will prevent the possibility of an account 

 being paid twice ; will save trouble with disputed accounts ; 

 and enable track to be kept of troublesome things such as 

 sacks, over which a lot of money is lost every year. Further, 

 if the farmer wishes to obtain a loan from his banker, it is 

 more easily arranged if he can produce a proper statement 

 of account — and other advantages ensue. 



The strongest inducement to account keeping may be 

 mentioned last, i.e., liabihty for Income Tax Assessment. 

 A farmer may now choose to be taxed on his profits instead 

 of on the double rental, but in this event, he must produce 

 accounts to the authorities. Though the great majority 



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