fines it, is: art or system of making up or stating accounts; the body of scientific principles underlying the keeping and explanation of business accounts. Accounting explains the results furnished by the bookkeeper and draws the necessary inferences as to the condition and conduct of the business. . In its broadest sense, accounting implies not merely a statement of facts, but a systematic and orderly development of data which point to some conclusion. The aim of accounting both in municipal and private water utilities is, of course, to supply financial information. A good accounting system is one which records financial data in such a manner that they can be used as a guide for effective managament, as a means of determining the fidelity of persons administering funds, and as a source of information for regulatory bodies, municipal water boards, creditors, stockholders and customers. For utilities to operate effectively without the aid of financial information is obviously impossible. A utility's budget, to be sound, must be based on past experience, as this is reflected in the financial statements of previous years ; hence the importance of accurate data. Too often, small utilities overlook the importance of maintaining comprehensive bookkeeping systems. They take the attitude that the time, effort and expense of maintaining accounting data are not warranted. Thus they fail to maintain acco nting records of the type needed to secure loans for extensions and improvements or to prove the need for retaining or increasing rate schedules. Although small utilities are seldom financially able to maintain elaborate bookkeeping or accounting systems, there is little excuse for their not establishing a simple system of records which would permit them to keep such accounts as are essential to their suc-