Lesson L060022: Record Keeping Agribusiness Library Lesson L060022: Record Keeping

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.

Terms Budget Depreciation Inventory list Transactions

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

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

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.

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.

How is it possible to identify and describe the characteristics of good 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.

How is it possible to identify and describe the characteristics of good 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.

How is it possible to identify and describe the characteristics of good 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.

How is it possible to identify and describe the characteristics of good 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.

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?