apn301t farm information and recording
DESCRIPTION
farming fundamentlsTRANSCRIPT
Department of Crop SciencesAgribusiness Management Section
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Department of Crop SciencesAgribusiness Management Section
FARM MANAGEMENT INFORMATION
By PHEELLO ISAAC TSOTETSI
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Department of Crop SciencesAgribusiness Management Section
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LEARNING OUTCOMES
At the end of this section a student is expected to:
Identify farm business or agribusiness accounting records and/or recording systems.
quickly visit the library and make copies or summaries from the reserved textbook
Department of Crop SciencesAgribusiness Management Section
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PURPOSES AND USE OF FARM INFORMATION
Measuring profit and Assess Financial conditions’
Provide data for business Analysis
Assist in acquisition of finances
Measuring profitability of individual enterprises within a company or farm
Assist in the analysis of new investments
Prepare income tax returns
Department of Crop SciencesAgribusiness Management Section
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Department of Crop SciencesAgribusiness Management Section
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Farm management information system
In this case we are referring to farm records mainly used in the farm business/agribusiness accounting.
All what is contained in these records has a direct relation to the four factors of production in agriculture
Natural resourcesLabourCapital
Talent and attitude
Department of Crop SciencesAgribusiness Management Section
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Farm business activities to be included in an accounting system
Investment activities
Financing activities
Accounting system
Production activities
Department of Crop SciencesAgribusiness Management Section
Basic accounting terminology
A person does not necessarily need an accounting degree to keep and analyse a set of business records
1. Account payable2. Account receivable3. Accrued expenses4. Assets5. Credits6. Debit7. Expenses
8. Inventory9. Liability10.Net income11. Owner equity12.Prepaid expense13.Profit14.Revenue
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Department of Crop SciencesAgribusiness Management Section
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OPTIONS IN CHOOSING AN ACCOUNTING SYSTEM
Before recordings are made a system needs to be chosen based on a list of options.
1. Period of accounting
2. Cash or Accrual
3. Single or double entry
4. Basic or complete sys.
Department of Crop SciencesAgribusiness Management Section
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1. Period of accounting 2. Cash or Accrual accounting
A choice is split between
a quarterly, half yearly & yearly accounting periods
On a fiscal year is for mngt and taxes, beginning at any time of the year.
Cash accounting - recognises income when it is actually received & actually paid = Accountants (bookkeepers).
Accrual accounting - recognises income when it is earned & liabilities when they are incurred = Mangrs.
Department of Crop SciencesAgribusiness Management Section
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3.Single or double entry 4. Basic or complete sys.
A single entry cash system – only one entry is made (receipt or expenditure is recorded) e.g. Grain sales = R20 000
A double entry system - records change in asset values and liabilities as well as in revenue and expenses:
Assets = Liability + Equity
Basic accounting system – is simple manual and uses cash accounting only.
A complete accounting system - is computerised and critical capabilities . The system can do both basic and accrual accounting.
Department of Crop SciencesAgribusiness Management Section
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THE OUTPUT FROM AN ACCOUNTING SYSTEM (Use Kay et al. 2012 from the reserve shelf)
An accounting system should be able to produce basic financial reports at the time and form they are required in.
The first common reports to be released by an accounting system are:
1. The Income Statement,
2. The Balance sheet and others.
Department of Crop SciencesAgribusiness Management Section
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The Income Statement and
The Balance sheet
Transaction journal
General ledger
Depreciation schedule
Inventory report
Enterprise reports
Income tax reports
Cashflow Statement
Equity statement
Family expenditure report
Department of Crop SciencesAgribusiness Management Section
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The Income Statement – reports on revenues and expenditures
The Balance sheet – reports on the financial position of the business or farm at a point in time
Transaction journal – records all financial transactions and people involved in them
General ledger – Contains different account of the business and balances in them
Depreciation schedule – the depreciation of all assets is recorded
Inventory report – all assets and their values and intangible ones
Department of Crop SciencesAgribusiness Management Section
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THE NEXT LECTURE WILL FOCUS ON
1. The output from an accounting system (Use Kay et al. 2012 from the reserve shelf)
2. The balance sheet (Use any source)
Department of Crop SciencesAgribusiness Management Section
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Department of Crop SciencesAgribusiness Management Section
THANK YOU
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