Chapter Two Flashcards
- List two taxes farmers are liable to pay?
(i)Income Tax
(ii) PRSI (Pay related Social Insurance.
(iii) USC (Universal Social Charge)
(iv) Capital Gains Tax (CGT)
(v) Capital Acquisition Tax (CAT)
(vi) Value Added Tax (VAT) if registered.
- What is a ‘STATEMENT’ is in relation to farm accounts?
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- Why a cheque should be crossed.
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- List TWO pieces of information that should be on an invoice.
Customer name.
Supplier Name
Date the bill was sent.
V.A.T
Total Value of goods.
Docket Numer.
- Why credit cards should be avoided when paying for goods.
Avoid interest: Credit cards should be avoided if possible for farm costs unless it possible to clear the balance before interest needs to be paid.
Interest rates are usually quite high (over 13% per anum). Credit cards can be used if the balance owed is cleared before the interest is charged.
- What is the definition of a Non-Depreciable asset
An asset that does not fall in value due to wear and tear. Eg Land.
- What is the ‘Golden Rule’ of filing?
“File it so that you can find it”.
- List two of the documents needed for farm accounts.
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- Which ONE of the following list of four options is NOT a physical efficiency on a beef farm?
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If this exact question comes up on the day you’ll just have to recognize what’s not on the table.
- List two pieces of information that can be found on a bank statement.
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- Complete Bank reconciliation – check from page 56 in the book
See book.
- Explain the difference in ‘’INPUT’’ stocks and ‘’OUTPUT stocks on the farm.
Input stocks are purchased raw materials that go into producing finished saleable products on the farm.
Output stocks are products produced on the farm that go into producing finished saleable products on the farm.
- Livestock of all ages are entered into the stock inventory as the same age and livestock units. – True or false
False. Livestock are entered into the stock inventory at different ages and livestock units.
- What is the definition of a depreciating asset and list and example?
An asset that fall in value due to wear and tear. Eg Machinery/Buildings.
Non Depreciate asset - Do not ear out/lose value.
- In depreciation terms, what is the ‘’diminishing balance’’ method
It reflects the true wear and tear on a machin or building. Eg a 60000 tractor depreciated at 10% (6000) is worth 54,000 at the end of the year.
In the second year the accountant gets 10% of the 54,000 in the second year (5,400).
- In depreciation terms, what is the ‘’Straight line’’ method
It’s rel
- A farmer buys a new quad for €10,000. How much is the quad worth after 3 years if it depreciates at a rate of 10% per year. Depreciate using the diminishing balance method.
Is it 7000 euro?
There are a number of important reasons why farmers should keep farm accounts. Discuss in detail the reasons for keeping farm accounts?
- To measure Profit or Loss.
- For Tax
- Grant Aid for Developmental Work and for VAT.
- To avail of Education Maintenance Grants.
5 For a Successful Loan Application. - For examining the Farm Business.
- Physical Efficiencies.
- To monitor and control Spending.
- To enable your Agricultural advisor to draw up a detailed farm development Plan.
10 To measure trends in Net Worth.
Teagasc provides a variety of different supports for Irish farmers. Explain in detail some of ways Teagasc supports farmers?
Discuss in detail five key physical performance indicators for your chosen enterprise (beef, dairy, sheep, tillage or other)?
Describe five benefits of farm partnerships to an Irish family farm?
What are the ten reasons to keep accurate accounts and records?
- To measure Profit or Loss.
- For Tax
- Grant Aid for Developmental Work and for VAT.
- To avail of Education Maintenance Grants.
5 For a Successful Loan Application. - For examining the Farm Business.
- Physical Efficiencies.
- To monitor and control Spending.
- To enable your Agricultural advisor to draw up a detailed farm development Plan.
10 To measure trends in Net Worth.
What is an invoice?
An invoice is a request for payment from the supplier to the customer.
Difference betwen Direct Debit and Standing Order?
Direct Debit - Payment taken automatically from bank account to service provider. Amount varies depending on how much the service was used.
Standing Order similar to a direct debit except that the amount of money does not change.
Disadvantage of Cash?
Cash payments without proof of purchase (receipts) cannot be used as a farm cost for tax purposes.
The five types of bank accounts a farm can have?
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What is physical and Financial Farm Data needed for?
Measuring physical enterprise performance.
Measuring Farm Management accounts
Tax accounts.
What are the rules accountants follow when valuing livestock?
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What are the key differences between Management and Taxation accounts?
What is a Capital Allowance?
