234 
PARK AND CEMETERY. 
COST ACCOUNTING AND CARE FUNDS 
An address before the Association of American' Cemetery Superintendents at 
Minneapolis, by Robinson Farmer, of the Southern Ohio Vault Co., Columbus, O. 
Cost accounting and care funds : The 
need, purpose and requirements of a 
proper system of accounting cannot be bet- 
ter expressed than by quoting from an ad- 
dress by Allan Ripley Foote, president of 
the International Tax Association and 
commissioner of the Ohio State Board of 
Commerce, at the meeting of the Ameri- 
can Association of Public Accountants at 
Denver, in October, 1509. 
Accounting records should be a true ex- 
hibit : "Correct records of all transactions 
are a fundamental basis for the effective 
economic regulation of the affairs of every 
person, partnership, corporation and gov- 
ernment. 
“A correct tabulation is not in itself a 
correct record. A record, to be correct, 
must be kept in a way to show, by proper 
grouping, the true relation between every 
factor involved in costs of living, costs of 
distribution, costs of doing business, and in 
the final statement, showing the profit or 
loss for a fiscal year, or of a period of 
years. 
“Just judgments are rendered only when 
based on a correct knowledge of facts. 
Scientific accounting is shown by cor- 
rect grouping: "There is a wide differ- 
ence between honest accounting and scien- 
tific accounting. One may have a record 
that will honestly account for every dollar 
received and expended without having a 
record that will give any intelligent infor- 
mation regarding the true relation between 
all economic factors involved in statements 
of costs or of profits or losses. 
“The record of all accounts should be 
intelligently grouped to show the economic 
effect of every factor essential to a true 
statement of costs or of profits or losses. 
Unintelligent accounting works greater 
harm than dishonest accounting : "Far 
greater harm results from unintelligent 
than from dishonest accounting. In prac- 
tical affairs, unintelligent accounting is the 
rule, dishonest accounting the exception. 
The effort to displace both of these forms 
of incorrect accounting by the adoption of 
scientific accounting meets with greater re- 
sistance from those who know their ac- 
counts are honestly kept than from those 
who know they are not keeping their ac- 
counts honestly. The normal man can be 
more easily persuaded that he should keep 
his accounts honestly than he can be 
brought to understand that it is not neces- 
sary for him to be dishonest in order to be 
entirely wrong. 
“Scientific accounting safeguards hon- 
esty. It prevents dishonesty. 
“Losses caused by ignorance are enor- 
mously greater than losses caused by dis- 
honesty. 
Incompetent accounting a menace to busi- 
ness : “Incompetent accounting is the cause 
of more failures than all other causes com- 
bined. It gives incorrect information as to 
costs of living, products and services, 
which leads to the acceptance of insufficient 
compensation, a course that must resjilt in 
failure with a certainty from which there 
is no escape. No one can pay three dol- 
lars and sell for two dollars without im- 
pairing his capital. If he makes the trans- 
action often enough, his entire capital will 
be exhausted, his failure will be an- 
nounced. 
"Incompetent accounting is the cause of 
retarded economic development. It fails 
to show where economies may be effected. 
In scientific accounting lies economic sal- 
vation : “Moral law teaches honesty as a 
principle. Economic law requires honesty 
as a practice. Scientific accounting renders 
honesty possible. 
Effective economic regulation : “There can 
be no scientific accounting without a 
grouping of items that will correctly show 
the relation to each other of every essen- 
tial economic factor in all statements of 
costs of living, costs of products, and costs 
of services.” 
■¥ * * 
A scientific system of accounting is not 
only one that is mathematically correct, but 
one that will give the greatest amount of 
information in regard to the business, its 
condition and the causes that have in- 
creased or decreased its profits in any 
given year. No two cemetery associations, 
however similar, can be treated in exactly 
the same manner, except in a general way. 
(The organizations of the association dif- 
fer, their restrictions are not the same, the 
laws of the states under which they oper- 
ate vary, as does the topography of the 
land, climate and any number of other 
conditions.) This is especially true with 
regard to detailed cost systems, and this 
fact explains why the model systems de- 
vised by committees of various manufac- 
turing associations have failed to be of any 
service to the majority of those for whom 
they were intended. I think this will an- 
swer the question so often asked relative 
to having a committee draft a uniform 
system of accounting. Profit by the ex- 
perience of others — it cannot be done sat- 
isfactorily. 
Let us consider, for a little while, in a 
general way, the essentials of Scientific 
Cost Accounting for Cemetery Associa- 
tions, and the connection with the Reserve 
for Perpetual Care. For illustration, we 
will assume that we have an association 
duly organized — -not for profit — that all 
lots are sold under perpetual care agree- 
ment. (By perpetual care we mean such 
care as shall keep the grounds, roadways, 
etc., in a general neat and tidy condition.) 
Special care may be provided for by en- 
dowment, or by paying a fixed sum an- 
nually, according to the special work to be 
done. “Special care” to include watering, 
extra cutting of grass, planting of flower 
beds, maintenance of monuments and mau- 
soleums, etc. 
The first essentia! of a cost system is ac- 
curate physical statistics. The grounds 
should be accurately surveyed and a map 
made of it, drawn to an exact scale. The 
area to be used for general purposes, such 
as the buildings at the entrance, contain- 
ing the offices and reception rooms for the 
public, chapel, greenhouses, stables, etc., 
should be measured. A system of road- 
ways should be outlined and the land to 
be used for them measured also. Knowing 
the cost of the whole plot and its areas in 
acres and odd square feet, the cost price of 
the land used for general purposes can be 
calculated. To find the cost of each lot it is 
not correct to divide the total cost of the 
property by the number of square feet into 
which it is divided. This would give the 
least desirable lots the same inventory 
value as those most desirable, such as cor- 
ner lots, those situated on main driveways, 
and those that are most conveniently or 
advantageously located. The proper method 
is to take a plot of the property on which 
the selling price of each lot is marked, and 
from it to ascertain the selling price of the 
whole property. The proportion between 
this and the cost of the whole property 
will then be the proportion between the 
selling price and the cost of each lot. That 
is, if the total selling price is three times 
the total cost, the inventory or cost of 
each lot will be one-third of its selling 
price. If these are inventoried at the av- 
erage cost of all the lots, an entirely false 
condition will be shown. 
There are certain general improvements 
that have to be made before the land is 
ready to be subdivided and offered for sale. 
These comprise the leveling or grading of 
the whole plot, a general system of drain- 
age, water mains, the erection of boundary 
fences, and any other improvements that 
affect the whole property. The cost of 
these is to be added to the original cost' 
of the bare land. As the property will not 
develop itself without executive super- 
vision, the general or administrative ex- 
pense incurred during the process of de- 
velopment Is also an addition to the orig- 
inal cost of the whole property. 
An entry should be made : “General 
Public Land to Land. To charge off the 
cost of Sand to be used for general pur- 
poses.” 
Improved land : The value remaining in 
