Week 7 & 8
Agricultural Science SS2 Third Term
Topic: Farm Accounts
Contents –
- Farm Accounts
- Types and Importance of Farm Accounts
Farm Accounts
Farm Accounts are statements of money paid out or received for goods and services used in farming business. Money is received due to sales of farm produce or loans from other sources while money is paid out for purchases of farm produce or settlement of debts. At the end of a given period, the farmer should be able to know whether the business is yielding profits or losses.
Types of Farm Accounts
- Sales Account – This shows the details of produce sold which also includes – type of produce, quantity sold, amount paid by customer, date sold and customer’s information. Also known as sales and receipt account.
- Purchase Account – This shows the details of all items purchased for use on the farm. It includes name of input, date purchased, number of input or quantity and cost of input.
- Farm Valuation – Farm valuation is carried out to get the time value of the farm. It is carried out at the beginning and end of the accounting or production period.Valuation of the farm at the beginning is known as Opening Valuation while at the end of the production year is known as Closing Valuation.
Importance of Farm Valuation
- A good valuation will determine the disposable value of the farm when the need arises
- useful for tax assessment
- Used to prepare balance sheet
Read more Below:
https://passnownow.com/lesson/farm-accounts/
