The farm accounting is a technique of using accounting data for cost and profit ascertainment of each farming activity and decision making with regard to the most profitable line of activity.

Profitability of Crops:

The performance of each crop shall be found out separately. The direct cost clearly identifiable with a crop shall be charged accordingly. The common cost should be suitably allocated on some accepted basis, For instance, depreciation or repairs can be divided on the basis of estimation of usage by different crops. Interest on fixed loan can be divided on the basis of length of crop season etc.