Econ Module 6.2 Flashcards
Written statements or collection of facts and figures on a subject for a definite purpose
Farm Records
Written financial statements which are integral parts of a well-organized farm record
Farm Accounts
Distinguishing feature of accounts
Money values
Types of farm records and accounts based on form
single entry form
double entry form
Farm records that are the kind kept by most small Filipino farmers. Each transaction is entered into only one account, which supplies specific information regarding the business’ operations.
Single entry form
Type of farm records that are used in standard business accounting. Rules and procedures are well-established.
Double entry form
These are used to evaluate the financial performance of an individual enterprise or the whole farm. They are also used for cash flow analysis.
Financial Records
They include the primary cash transactions like income and expenses of the farm business. Purchases and payments can be recorded on one page, and receipts and sales can be recorded on another.
Financial Records
2 kinds of financial records
Farm Income records and Farm Expense records
Types of Farm records and accounts based on functionality (2)
- Financial Records
- Physical Records
Type of farm records and accounts that complement the financial records and are essential to answer questions about technical relationships and resource allocation.
They show the quantities of inputs used and outputs obtained. They also indicate the timing and methods of operations.
Physical Records
Physical record that give a record of the location, size of the farm, soil types, land use, and possibly, past soil treatments
Farm maps
Physical record that show inputs used and output realized
Crop records
Physical records that include feeds records, production records, etc.
Livestock records
Physical records like machine logbooks, labor records, pest and disease control records, marketing records, rental records, etc.
Other specialized records
Principles of Farm Record (6)
- Accurate and filled in as soon as possible
- Neat and written clearly
- Complete - does not leave out any information
- Simple in design - should be easy to keep and retrieve
- Easy to analyze
- Appropriate
It is a detailed list of all properties with values assigned to them both at the beginning and end of the accounting period. It is often referred to as the property list.
The Farm Inventory
Method of asset valuation that uses current or actual purchase price.
This method is most appropriate for items with short life span like farm supplies, fertilizer, chemicals, feeds, seeds, containers, veterinary medicines, and the like.
Original cost or market value
Method of asset valuation that is used for purchased items that do not change value within a year. A very good example is the value of land.
Normal market value / Average selling price of an item for a certain number of years
Method of asset valuation that is applied for items consumed in the farm at the time the inventory is taken, like home-grown feeds, crops, and livestock set aside for home consumption.
Present market value
Method of asset valuation that is used for farm products sold or about to be sold or commodities primarily held for sale using net selling price computed as selling price minus marketing cost.
This can be used for items like crops and livestock sold or to be sold, culled animals, stored crops, and crops consumed at home.
Net selling price
Method of asset valuation that is used for items that do not have market values, but certain values are assigned to them to estimate their contributions to the enterprise.
An excellent example is the labor done by the operator and his family. No cash amount is involved
Imputed value
Often its value is based on the prevailing wage rate in the community. If labor is hired, they are paid in cash, and the actual cost is used in valuation.
Imputed Value
This method can be used for farm buildings, farm machinery, tools and equipment. and purchased breeding stocks. Each year, the item’s value is reduced by the amount of depreciation for that year. Therefore, the current period’s value is equal to the original cost less the accumulated depreciation from the purchase year to the present time.
Original cost less depreciation
This is used for properties whose values considerably change from year to year. The original value is arrived at by estimating the cost to replace the property at current prices.
Replacement cost less depreciation
This is based on the theory that the purchase of a property is, in reality, the purchase of future income. The value of the asset under this method is contingent upon the probable amount of income.
Income capitalization
