Accounting Activities
What are the three activities involved in farm accounting?
Financing, Investing, and Operating
What is the accounting equation?
Assets= Liabilities + Equities
Useful financial statements are_________,__________, and ________.
Understandable, Reliable, and Relevant
What is the end product of financial accounting? List them.
What group developed the standardized procedures of farm accounting?
a. Financial Accounting Standards Board (FASB)
b. Farm Financial Standards Council (FFSC)
c. Financial Guidelines for Agricultural Procedures (FGAP)
d. Generally Accepted Accounting Principles (GAAP)
A. Financial Accounting Standards Board (FASB)
Define Financing activities. What accounts are associated with Financing activities?
Activities in which financial capital is provided to the farm business.
Accounts associated are liabilities and equities
Define Revenues
Money earned by the farm business from the production or sale of farm products
In terms of accounting, what is it mean to be relevant?
What is financial analysis?
Is a set of procedures in which farm’s financial position and financial performance are evaluated
Name other accounting concepts. (Hint there's 4 listed).
Define investing activities. What accounts are associated with Investing activities? Why?
Activities involving buying and selling of assets needed for the production of farm products.
Assets
Define Expenses.
The costs of operating the farm
What are the farm financial statements?
Define financial position.
Financial state at a specified point in time
What is a separate entity?
Each economic entity must maintain their own financial records
Define operating activities. What accounts are associated with Operating activities?
Day-to-day activities of producing or selling crops and livestock.
Revenues and expenses
Define Losses.
Financial losses from various activities.
What is the role if accounting?
The role of accounting is to provide information for good financial management.
Define financial performance.
How profitable the farm was over a specified period of time.
What is a going concern?
The business is expected to exist indefinitely and thus, financial record keeping should reflect this
Which scenario is an operating activity?
a. Farmer purchases feed for the farm.
b. Bill gets a loan from the bank.
c. Frank buys a tractor for his farming operation.
A
What is financial accounting?
Involves the recording and reporting of financial information.
Describe one reason why financial statements are important.
What are the types of financial analysis?
What is full disclosure?
The economic entity provides all the information necessary to verify and clarify the financial records and reports.