IMPORTANCE OF FARM ACCOUNTS/RECORDS
Subject:
Agricultural Science
Class:
SS 2
Term:
THIRD Term / 3RD Term
Week:
Week 7
Topic:
IMPORTANCE OF FARM ACCOUNTS/RECORDS
Previous Knowledge: The pupils have previous knowledge of
BASIC AGRICULTURAL SUPPLY. THE LAW OF SUPPLY
that was taught in their previous lesson.
Behavioural Objectives : At the end of the lesson, learners will be able to
- Define the IMPORTANCE OF FARM ACCOUNTS/RECORDS
Instructional Materials
- Wall charts
- Online Resource
- Textbooks
- Laptop
- Crop samples
- Pictures that are related to the subject matter
- Flash cards
- www.edudelighttutors.com
Methods of Teaching
- Role modelling
- Questions and Answers
- Explanation
- Discussion
- Recitation
- Imitation
- Story Telling
- Dramatization
WEEK SEVEN
FARM RECORD AND FARM ACCOUNT
CONTENT
- Meaning of Farm Accounts/Farm records
- Importance of Farm Account / farm records
- Types of Farm Record
- Types of Farm Account
MEANING OF FARM ACCOUNTS AND RECORDS
FARM ACCOUNT
Farm Accounts are statements of money paid out or received for goods and services used in a farming business.
FARM RECORD
Farm Records are written documents, showing major activities going on in the farming business
IMPORTANCE OF FARM ACCOUNTS/RECORDS
- It enables the farmer to monitor the changes in prices of product brought or sold.
- It shows the financial position of the farm
- It helps to determine profit
- Detection fraudulent decisions
- For taking informed management decision
- For procurement of loans
- For determination of annual tax
- Determining the actual worth of the farm
- For comparing management efficiency
- To evaluate performance of an enterprise
- To estimate future farm returns.
- It provides basis for conducting research.
- To monitor health status of crops and animals.
TYPES OF FARM RECORD
- Farm Diary: This is the record of daily activities
- Farm Inventory: This is the list of all assets on the farm and their money worth or value
- Sales and purchase record: record of revenue and expenses made by the farm business.
- Yield or production record: it contain the information on output of crops and animal product
- Payroll or labour record: It shows the amount and types of labour hired or employed to work on the farm and rate at which their wages are paid
- Farm Input Utilization Record: It shows the input required, utilized and their level of input application.
TYPES OF FARM ACCOUNT
- Sales Account: Sales Account is also known as sales and receipt account. This shows data of farm produce, the quantity, date sold, to whom and at what price.
- Purchase Account: It is also known as purchased for use on the farm.
- Farm Valuation: This is the value of the farm at the beginning and end of production. At the beginning it is called opening valuation while at the end, it is called closing valuation.
- Cash Analysis Account: It shows the details of the income and expenditure of a farm over a given period of time
- Farm Income Statement: It comprises of all the farm receipts (sales) and expenses came out on the farm over a period of time as shown below
- INCOME STATEMENT OF AKANDE FARMS FOR OCTOBER, 1995
-
EXPENSES ₦ RECEIPT ₦ Feeds 2000 Egg 5000 Drugs 400 Culled layer 3000 Water 100 Manure 200 Labour 500 Fuel 200 Net Income 5000 Total 8,200 8,200
- Balance Sheet or Networth Statement: The balance sheet shows the capital or financial position of the farm at the end of the accounting period usually a year.
- Profit and Loss account: This is the type of account prepared at the end of the business period, usually a year. By farmer with the purpose of knowing weather his business is making profit or loss.
In this account, all expenses and purchases are listed on the left hand side i.e. debit side and all receipts on sales are recorded on the right hand i.e. credit side. Closing valuation is also put on the right while opening valuation is put on the left.
IMPORTANCE OF PROFIT AND LOSS ACCOUNT
- It helps to detect if the farm is making profit or a loss
- It helps to determine the overall performance of the farm at the end of the account period
- It aids future planning of the farm for better results.
Example
Prepare a profit and loss account for Segun Farms for the year which ended 31/12/17, using the following data;
- Cost of feed N500
- Cost of drugs N 200
- Sales of Eggs N 2000
- Eggs for domestic use N 200
- Loss due to mortality N 300
- Value of stick left N 600
- Farm wages N 400
- Sales of spent layers N 1000
- Transportation cost N 300
- Depreciation N 200
- Electricity bill N 300
- Net profit N 1600
SOLUTION
SEGUN FARMS PROFIT AND LOSS ACCOUNT AS AT 31ST DECEMBER, 2017
| DEBIT | CREDIT | ||||
| S/N | ITEMS | ₦ | S/N | ITEMS | ₦ |
| 1 | Cost of feed | 500 | 1 | Sales of spent layers | 2000 |
| 2 | Cost of drugs | 200 | 2 | Eggs for domestic use | 200 |
| 3 | Loss due to mortality | 300 | 3 | Value of stick left | 600 |
| 4 | Farm wages | 400 | 4 | Sales of spent layers | 1000 |
| 5 | Transportation cost | 300 | |||
| 6 | Depreciation | 200 | |||
| 7 | Electricity bill | 300 | |||
| 8 | Net profit | 1600 | |||
| Grand Total | 3800 | Grand Total | 3800 |
Presentation :
The topic is presented step by step
Step 1: The class teacher revises the old topic
Step 2: The class teacher introduces the new topic
Step 3: The class teacher allows the pupils to give their own contributions and gives room for pupils” participation
Class Teacher and Pupils Activities. Interaction or Participation
This involves class teacher and pupils’ interaction, conversation, imitation or modeling through discussion, play method or just by recitation or asking and answering questions that are related to the topic that has just been taught.
EVALUATION
- What is farm record and account?
- List five importance of keeping farm records and account.
- List five types of farm record
- Explain any two of record mentioned
- List five types of farm account
- Explain profit and loss account
Conclusion :
The class teacher concludes the lesson by giving the pupils some notes on the topic that has just been taught. He goes round to mark and he does the necessary corrections.
