1. Obj 8.01: Define the terminology used in financial record-keeping systems. KEEPING FINANCIAL RECORDS

2. Current Asset  Items quickly converted to cash or that will be sold within 12 months  Cash  Checking  Savings  Stocks  Non-depreciable inventory of crops, livestock, etc. Non-Current Asset  Items that have a useful life of more than one year  Land  Machinery  Breeding livestock ASSET

3. CURRENT ASSETS + NON CURRENT ASSETS= TOTAL ASSETS

4. Current Liabilities  Debts that are due to be paid this year  Fertilizer & feed bills  Tractor & building payments  Part of mortgage due this year Non-Current Liabilities  Debts that are not due this year  Mortgage (not including this years payment) LIABILITIES=DEBTS

5. CURRENT LIABILITIES + NON CURRENT LIABILITIES= TOTAL LIABILITIES

6. TOTAL ASSETS - TOTAL LIABILITIES= NET WORTH

7. Non Depreciable  Items that will be used up or sold within a year  Feed  Supplies Depreciable  Items that have a useful life of more than one year and lose value because of age, wear or becoming out of date because of technology advancements  Cars  Machinery  Note: Land is NOT depreciable property INVENTORY: AN ITEMIZED LIST OF THINGS OWNED BY A BUSINESS