Agribusiness Library

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Agribusiness Library

• Lesson L060022 Record Keeping

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Objectives

• 1. Describe the functions of business records,
  and identify the kinds of business records.
• 2. Explain why record keeping is necessary to
  assess the current financial condition of a
  business and why it is helpful in planning and
  preparing for the future.
• 3. Identify and describe the characteristics of
  good record keeping.

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Terms

• Budget
• Depreciation
• Inventory list
• Transactions

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What are the functions of business records, and
what are some of the different kinds of business
records?

• Records provide a wealth of information for the
  agricultural business manager.
• A. Some of the functions of business
  records include
• 1. Calculating taxes
• 2. Providing information for management
  decisions
• 3. Determining overall profit
• 4. Calculating business profitability ratios

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What are the functions of business records, and
what are some of the different kinds of business
records?

• B. Different types of business records are also
  available to use.
• Sometimes records focus on specific priorities
  for the business.
• Types of business records include
• 1. Personnel
• 2. Financial
• 3. Tax
• 4. Inventory
• 5. Insurance
• 6. Purchases and sales

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Why is record keeping necessary to assess the
current financial condition of a business, and
why is it helpful in planning and preparing for
the future?

• Accurate and up-to-date
  business records are essential
  for any successful
  business.
• A. Record keeping is necessary
  to assess the current
  financial
  condition of a business.
• At any given time during the year, a business
  will need to know its financial health.
• More specifically, businesses need to send out
  invoice statements, pay bills, and may need to
  apply for an operating loan.
• These are some of the reasons it is necessary to
  keep accurate and current records.

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Why is record keeping necessary to assess the
current financial condition of a business, and
why is it helpful in planning and preparing for
the future?

• B. Record keeping is also
  helpful to plan and prepare for
  the future of a
  business.
• A successful business sets goals to
  improve its operation.
• Even attainable goals require
  significant financial commitment.
• Monthly cash flow statements, a budget, an
  inventory, and a complete listing of income and
  expenses are important aspects of good financial
  records that help a business prepare for the
  future.

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How is it possible to identify and describe the
characteristics ofgood record keeping?

• Good record keeping is essential to a
  successful business.
• Characteristics of good record keeping include
• A. An inventory list is a record of the value of
  equipment, machinery, livestock, grain, products
  for resale, and anything else used for business
  purposes.
• An up-to-date and accurate inventory list is
  important to determine the overall value and net
  worth of the business.
• Inventory should be taken on January 1 and
  December 31 of each year.

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How is it possible to identify and describe the
characteristics ofgood record keeping?

• B. A budget is a plan for a business that lists
  the expected income and expenses for a given time
  period.
• The purpose of a budget is to determine if the
  business has the potential to be profitable.

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How is it possible to identify and describe the
characteristics ofgood record keeping?

• C. A business should keep a record of all income
  and expenses.
• Transactions include the exchange of money for
  income or expenses.
• A detailed record of who, what, and how much the
  transaction was for is important to record.

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How is it possible to identify and describe the
characteristics ofgood record keeping?

• D. Depreciation is the decline in value of an
  asset over time.
• Depreciation is calculated on
  capital assets, such as
  equipment,
  machinery, or breeding livestock.
• The decline in value of an asset
  each year is calculated
  as an expense
  and is beneficial to a business when calculating
  taxes.

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REVIEW

• What are the functions of business records, and
  what are some of the different kinds of business
  records?
• Why is record keeping necessary to assess the
  current financial condition of a business, and
  why is it helpful in planning and preparing for
  the future?
• How is it possible to identify and describe the
  characteristics of good record keeping?