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’ The Importance of Farm Accounts ' 5 I   i
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Z ing their crops, feeding and caring for their live stock, and dis- _    
  posing of their products. One farmer may be using methods  
tg and practices much less economical or less productive than those   i {
K used by his neighbors. A considerable share of the wide differ- 2  
ences between the earnings of the best farmers and the poorest i   ·
farmers in a single area. for a given year has been found to be due in    
to differences in the methods and practices used in running the  
principal enterprises. The farmer who finds out his less eco-  
nomical and less productive methods and practices and either {Ek  _(··» "Y
correct or eliminates them, usually places his farm on a better  lnjiijgj
paying biasis. Keeping records is an effect-ive means by which a  
farmer can find out the truth about himself and his farm busi-   .  ·`i·' j  
ness and determine his less economical and less productive me- l  
thods and practices.    
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WHY TAKE A FARM INVENTORY EACH YEAR?   i
Because ; c   do
]. lt shows the net worth or total value of all property  
above the amount of liabilities and tells one whether he is get- l  
ting ahead or going behind and how much.  
_ 2. lt shows how the total investment is divided among the  
different parts ot the farm business. - · T t    
3. lt prevents drawing a false conclusion regarding pros-  
perity from the amount of cash on hand at the end of the year. ]· 
(lften a comparatively small amount of cash in the bank may  
discourage a farmer who has done well but has his earnings tied    
up in some kind of property. On the other hand a large amount  
of cash may have come from a decrease in inventory of other  
property. Cash on. hand taken ialone is not a safe guide to farm  
earnm      
4. lt helps to establish better credit. relations with the  
T ban,ks or other loan agencies. in borrowing money.  
5. It is very useful as a basis for adjusting losses in case  
of tire.  
6. It is necessary as a basis for keeping any system of ac-  
counts. .  
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