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In today’s Agricultural Science class, We will be learning about Farm Records and Accounts. We hope you enjoy the class!
FARM RECORD AND FARM ACCOUNT
- Meaning of Farm Accounts/Farm records
- Importance of Farm Account/farm records
- Types of Farm Record
- Types of Farm Account
MEANING OF FARM ACCOUNTS AND RECORDS
Farm Accounts are statements of money paid out or received for goods and services used in a farming business.
Farm Records are written documents, showing major activities going on in the farming business
IMPORTANCE OF FARM ACCOUNTS/RECORDS
- It enables the farmer to monitor the changes in prices of product brought or sold.
- It shows the financial position of the farm
- It helps to determine profit
- Detection of fraudulent decisions
- For taking informed management decision
- For the procurement of loans
- For determination of annual tax
- Determining the actual worth of the farm
- For comparing management efficiency
- To evaluate the performance of an enterprise
- To estimate future farm returns.
- It provides the basis for conducting research.
- To monitor the health status of crops and animals.
- What is a farm record and account?
- List five importance of keeping farm records and account.
TYPES OF FARM RECORD
- Farm Diary: This is the record of daily activities
- Farm Inventory: This is the list of all assets on the farm and their money worth or value
- Sales and purchase record: a record of revenue and expenses made by the farm business.
- Yield or production record: it contains the information on the output of crops and animal product
- Payroll or labour record: It shows the amount and types of labour hired or employed to work on the farm and rate at which their wages are paid
- Farm Input Utilization Record: It shows the input required, utilized and their level of input application.
TYPES OF FARM ACCOUNT
- Sales Account: Sales Account is also known as sales and receipt account. This shows data of farm produce, the quantity, date sold, to whom and at what price.
- Purchase Account: It is also known as purchased for use on the farm.
- Farm Valuation: This is the value of the farm at the beginning and end of production. At the beginning, it is called opening valuation while at the end, it is called closing valuation.
- Cash Analysis Account: It shows the details of the income and expenditure of a farm over a given period of time
- Farm Income Statement: It comprises of all the farm receipts (sales) and expenses came out on the farm over a period of time as shown below;
INCOME STATEMENT OF AKANDE FARMS FOR OCTOBER, 1995
- Balance Sheet or Net worth Statement: The balance sheet shows the capital or financial position of the farm at the end of the accounting period usually a year.
- Profit and Loss account: This is the type of account prepared at the end of the business period, usually a year. By farmer with the purpose of knowing whether his business is making profit or loss.
In this account, all expenses and purchases are listed on the left-hand side i.e. debit side and all receipts on sales are recorded on the right hand i.e. credit side. Closing valuation is also put on the right while opening valuation is put on the left.
IMPORTANCE OF PROFIT AND LOSS ACCOUNT
- It helps to detect if the farm is making a profit or a loss
- It helps to determine the overall performance of the farm at the end of the accounts period
- It aids future planning of the farm for better results.
Prepare a profit and loss account for Segun Farms for the year which ended 31/12/17, using the following data;
- Cost of feed N500
- Cost of drugs N 200
- Sales of Eggs N 2000
- Eggs for domestic use N 200
- Loss due to mortality N 300
- Value of stick left N 600
- Farm wages N 400
- Sales of spent layers N 1000
- Transportation cost N 300
- Depreciation N 200
- Electricity bill N 300
- Net profit N 1600
SEGUN FARMS PROFIT AND LOSS ACCOUNT AS AT 31ST DECEMBER, 2017
|1||Cost of feed||500||1||Sales of spent layers||2000|
|2||Cost of drugs||200||2||Eggs for domestic use||200|
|3||Loss due to mortality||300||3||Value of stick left||600|
|4||Farm wages||400||4||Sales of spent layers||1000|
|Grand Total||3800||Grand Total||3800|
- List five types of farm record
- Explain any two of record mentioned
- List five types of farm account
- Explain the profit and loss account
We have come to the end of this class. We do hope you enjoyed the class?
Should you have any further question, feel free to ask in the comment section below and trust us to respond as soon as possible.
In our next class, we will continue learning about Farm Records and Accounts. We are very much eager to meet you there.
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