1. Financial Records 9.0
Class Notes

2. Objectives:
AM09.01 Define the terminology used in financial record-keeping systems, such as asset, liability, inventory, net worth

3. A. Asset – things a person owns that have value or can be seen.
I. Terms
A. Asset – things a person owns that have value or can be seen.
1-. Current Assets
a. Cash or other assets which can be converted to cash through normal operations
b. Current assets are: Checking and/or savings accounts
-Inventory held for resale
2. Non-Current Assets
a. Assets used in producing a product or are not sold and not converted into cash within one year.
b. Non-Current assets are:
Tractors
Barns
Breeding Stock
3. Total assets= Current assets + non-current assets

4. 2. Liabilities-what you owe a. Current Liabilities ( 12 months)
1). Debts due within the operating year.
2). Current liabilities are:
- Accounts payable
- Rents
- Notes payable – current portion
b. Non-Current Liabilities
1).Debts due in more than one year.
2). Non-Current liabilities are:
- Notes payable – non-current portion
c. Total liabilities= Current liabilities + non- current liabilities

5. 3. Net worth = total assets minus total
3. Net worth = total assets minus total liabilities, also known as equity

7. 4. Inventory—an itemized list of things. owned by a business with the
4. Inventory—an itemized list of things owned by a business with the beginning value and depreciated value.
a. Non-depreciable—items that will be used up or sold within a year— Example: Feed, supplies, etc.
b. Depreciable—Items that have a useful life of more than one year and lose value because of age, wear or becoming out-of-date because of technology advancements. Land is NOT depreciable property.
Example- Equipment- livestock houses