38 BULLETIN 994, TJ. S. DEPARTMENT OF AGRICULTURE. 
DISTINCTION BETWEEN "COMPLETE COST ACCOUNTING" AND "FARM RECORDS." 
Many persons interested in the farm business are inclined to con- 
fuse the keeping of ordinary farm records with detailed cost account- 
ing. Most of the agricultural colleges, in cooperation with the 
extension agencies of the United States Department of Agriculture, 
have prepared farm record books for the recording of inventories 
and cash accounts for individual farms, and recently these have 
been used extensively in the making up of the income-tax state- 
ments required by the Federal Government. Keeping such records 
is a most important step in the business -operation of the farm, but 
it should not be called "complete cost accounting,''' nor should it 
be implied that the farmer will know the cost of producing his 
separate products by the keeping of such a book. 
The farm inventory and cash account will give the farm receipts, 
the farm expenses, farm income, labor income, the net worth, the 
interest earned on investment, and other figures that are very 
important to the farmer. Cost accounting goes considerably further 
in that it includes the labor record, feed record, production record, 
and the summarizing of the data at the end of the year so that each 
productive enterprise bears its share of the overhead or general 
farm expense. One is relatively simple and the other is so complex 
that few farmers can afford to give the attention necessary to keep- 
ing a set of detailed cost accounts. It is believed, however, that 
every farmer would find it advisable to keep a simple farm record 
book. 
To illustrate the wide difference in the results obtained by the 
detailed cost 7 accounting method as compared with the common 
farm record book, the following comparison is made: 
Results obtained from sim- j Results obtained, from detailed cost-accounting studies, 
pie jarm records. (Other than those given for simple farm records.) 
1. Total profit or loss. ]_. Relative profitableness of enterprise. 
2. Total receipts, ex- 2. Distribution of capital, income, cost, and profit or 
penses, farm income loss by enterprises. 
and labor income. 3. Relative importance of the elements of cost. 
3. Distribution of receipts 4. Labor requirements of enterprises. 
and expenses. 5- Distribution of labor bv days, months, and seasons, 
4. Total capital. and by enterprises. ] 
5 Total net wor'h I 6 ' tnizatlon ot various sized power units by operation. 
n ' T . 7. Comparative cost of operation of various forms of 
6. Income-tax statement. , * L 
, farm power. 
Crop acres per man and „ j^..,. \. , ,. ;.«. - , , , 
I _, * S. Utilization and working life o± tarm implements. 
9. Cost of maintaining farm work horses. 
10. Quantities of feed consumed per head by seasons by 
per horse 
8. Receipts per acre and 
per animal unit. various classes of stock. 
9. General distribution of n< Productivity of live stock. 
farm area. 12. Length of working day, by mdividuals, by seasons. 
13. Yielding qualities of the soil. 
14. What the farm contributes to the family living. 
15. Utilization of farm area by measured acreages. 
16. Arrangement of fields and farmstead. 
