Unit 2 Record Keeping. What makes a successful agribusiness? Dedication Knowledge Money = PROPER FINANCIAL MANAGEMENT Jupiter Images.

Unit 2Unit 2

Record KeepingRecord Keeping

What makes a successful agribusiness?

• Dedication

• Knowledge

• Money

= PROPER FINANCIAL MANAGEMENT

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Record Keeping

• SAE projects help with record keeping skills

• Important to keep good records for three reasons:

1. Management2. Obtain credit or loans3. Cash flow of SAE

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Types of SAEs

• Exploratory– Shadowing a Vet, feed

mill operator or loan officer

• Research– Select an area to

research and determine the outcome

• Placement– Student works for

someone

Types of SAEs

• Entrepreneurship– Student owns their own

business

• Ex: produce and market livestock or crops; lawn care business

– MOST common SAE = Entrepreneurship!

What is an enterprise?

• Enterprise– One total part of the

program – Must keep each

enterprise separate

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Inventory

• Beginning– Itemized list of all assets

at the start of record keeping period

• Ending– Itemized list of all assets

at the end of record keeping period

Valuation of assets

• Depreciation– Buildings, fences and

machinery decline in value over time

– Use the cost minus depreciation value to figure out total value

Draft, Pleasure, or Breeding Livestock • List livestock that have reached

their maturity value at their book value

Machinery, Equipment, and Fixtures • List at their remaining book

value Land Improvements, Buildings

• List improvements such as tilling, buildings, and fences at their remaining book value

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Inventory Assets

• Livestock– Price per pound,

hundred weight or head

• Stored Crops– Price per bushel, ton,

bale or pound

• Growing Assets– Cost invested per acre,

flat, individual plant or individual animal

• Other Assets– Price per hundred

weight, ton, gallon, bag, item or acre

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Record Keeping Transactions

• Transaction– Any exchange of money

• Expense– Transactions where any

money is spent

• Income– Money is gained

Types of Transactions

• Sales and Income Transactions– Revenue derived from SAE

• Expense Transactions– Cost of goods and services

involved with SAE

• Exchange Labor Transactions– Exchange of labor for

money or use of equipment

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Types of Transactions

• Non-SAE Income Transactions– Divided into four areas:1. Agricultural Earnings Not Related to the SAE2. Earnings and Income from Non-Agricultural Activities3. Gifts of SAE Assets4. Gifts and Income Other Than Earnings

• Land Transactions– Any land being used and all expenses must be

recorded

Closing Records

• Balance Sheet– List of all assets and

liabilities– Use this to determine

the owners equity or net worth.