The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1910-05-12
BY
J. A. BEXFLL, A. NJ.
Dean of School of Commerce,
Oregon Agricultural
College.
Copyright. 1910. by American
Press Association.

lowing rates on the cost or market val
tie are fairly accurate:
Per cent
, Buildings. including insurance and re-
pairs Observation-Disclosures.
Horses above live years .................. 10
WIN COWS go: '''''-'...'.'..''........
Machinery and tools NEUTRALITY-SUSPICIOUS.. 10
In accurate accounting the question
, often arises. What shall be considered
Equipment and what supplies? Sup
blics are defined as expendible or con
sumable materials, which are incapa
Die Of being used more than once
while equipment Is OF more perina-
nent character. articles which can be
used repeatedly. Fuel. lubricatiEg OIL
rotton waste. feed, etc. ire supplies
while machinery. furniture and ap
paratus Of all kinds are equipment
The distinction between improve
ments and repairs l. not always clear
ly understood. An improvement adds
value to the property in the shape OF
equipment, buildings. drains. fences
and the like. while repairs merely
keep up the property. a coat of paint
provement; repainting is classed uu-
der repairs This distinction is very
important in making an inventory
improvements are added to the inven-
tory; repairs are not.
1t Is convenient to devote a part Of
the daybook to inventories and state
ments or If loose leaf books are used
to devote II special section to the sub
Ject. The yearly profit or loss is de-
termined from the inventories as fol
lows:
| Net worth now Observation-Disclosures. S10,334. S
| Net worth last year ............... 9.tS3.so
Net profit Observation-Disclosures. SS5l.09
| The net worth is. of course. the diff
ference between the resources and liza
biities.
The most satisfactory bill file Is an
alphabetically arranged pocket file
! about o by - inches. In it should be
filed bills for machinery. implements.
tools, live stock. furniture. ETC.. which
will be subject to inventory: also re-
ceipts. Cancelled notes. certificates. i'm
portant clippings from periodicals and
any other matter of interest. Proper
ly kept, the bill file will prove invalua,
bic for future guidance.
A More Satisfactory Method.
The method of determining the profit
| shown above was unsatisfactory be
cause it did not point out the source
of the profits or losses. For this pur
pose it is necessary to adopt several
additional records.
The cashbook, illustrated on form
5, is the basis of classification. The
special columns take the place OF u
ledger. All money columns except the
total column are known as distribu
tion columns. They are in reality sep
arate accounts. and this form might.
therefore. properly be called com
bined ledger and cashbook. The form
suggested has the important advantage
of being self balancing A trial bal
ance can be taken at the end OF each
page, month or year The process OF
preparing financial statement be
comes extremely simple by this meth
cd.
An abstract OF the totals OF the va
rious columns is all that is necessary
Many successful farmers keep no
other books than record of transac
tons with the bank. The receipts
and payments are recorded. as shown
in Fig. o, except that the payee OF
the check Is entered in the payment
items column. while fuller explanation
is entered on the check stub. (See
Fig. A.
The banking habit carries with IL
many advantages. Important among
them are:
First.-The depostor's credit and in
fiuence is measured largely by the size
and regularity of his bank account
Second.-A tendency 10 economlze
by a desire to increase the bank bal
ance.
Third.-The banker becomes your
bookkeeper and business counselor.
Fourth.-Security against fire and
robbers.
Fifth. checks are both rec
ords and receipts of payments.
Sixth.-A benefit to the community
by keeping the money in circulation.
Household Accounts.
1t will be seen that no provision has
been made in the general cashbook
for separate items In the household ac-
counts. This is left for the house
keeper. The fact that her field Is
somewhat limited from business
point OF view is no argument In favor
OF loose aud careless methods OF ac-
counting.
| Most housekeepers prefer to receive