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3.a.sci.d3.farm Accounts

The document outlines various types of farm accounts including sales, purchase, cash analysis, profit and loss, and balance sheet accounts, highlighting their purposes in tracking farm financials. It also discusses the importance of bookkeeping and source documents such as invoices, receipts, and vouchers in maintaining accurate financial records. An example income statement for Akande Farms is provided to illustrate the financial transactions and net income for a specific period.

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Olusola Isaac
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18 views14 pages

3.a.sci.d3.farm Accounts

The document outlines various types of farm accounts including sales, purchase, cash analysis, profit and loss, and balance sheet accounts, highlighting their purposes in tracking farm financials. It also discusses the importance of bookkeeping and source documents such as invoices, receipts, and vouchers in maintaining accurate financial records. An example income statement for Akande Farms is provided to illustrate the financial transactions and net income for a specific period.

Uploaded by

Olusola Isaac
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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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.
PROFIT AND LOSS ACCOUNT
This record shows whether a
farm is running at a profit or
loss.
 BALANCE SHEET OR NET WORTH 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.

INCOME STATEMENT OF AKANDE FARMS FOR MAY, 2021.

EXPENSES ₦ REVENUES ₦
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
 BOOK KEEPING
 This is the systematic record of daily transactions of
a business in the appropriate books.
 Importance of book keeping
 1.It provides a permanent record of all financial
transactions.
 2.It shows the income and expenditure of the
business.
 3.It shows the financial position of the farm
business.
 4.It helps to detect errors in business transactions.
 5.it helps to provide proof in times of doubt or proof.
SOURCE DOCUMENTS
A source document are forms in which transactions are first
recorded before they are posted to their respective books.
Examples of source documents are:
1.Invoice
2.Receipts
3.Cash register
4.Credit note
5.Debit note
6.Voucher
7.Cheque
 INVOICE
 This is a document given out by the seller to the buyer
whenever sells goods. To the seller ( supplier), the invoice
is a sales invoice while to the buyer, it is a purchase
invoice.

 DEBIT NOTE
 This is a source document issued by the seller when the
buyer has been under charged.
 CASH REGISTER
 It contains the summary of each cash sales per day or
for any specified period.

 CREDIT NOTE
 This is a source document issued by the supplier or
seller when a buyer returns goods to the supplier or
seller. It is also issued to correct the error of
overcharge and it is usually printed in red.
 RECEIPT
 A receipt is a document issued to the buyer by the
seller to indicate that some amount of money has
been paid for buying particular goods or services.
 It is a therefore a legal proof of payment.
 It usually s contains the details of the
transactions, the name of the buyer and the the
total amount paid.
VOUCHER
It is a source document used for obtaining
authorization for a payment whether by cash or by
cheque.
CHEQUE
It is written order to a bank to pay a specific
amount of money to a person or a company whose
name appears on it. It is usually issued by a creditor
or debtor

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