financial statements and planning exam 1

economic entity

a business ex) farm

financial statements

used to gain a summary-level view of different aspects of a farm’s financial performance

what are the types of financial statements

income statement, balance sheet, statement of cash flows, statement of owners equity

income statement

shows revenues, expenses, and profit/loss for a period of time

formula for income statement

total revenue - total cost = profit

balance sheet

shows assets, liabilities, and equity at a specific time

accounting equation

assets = liabilities + equity

statement of owners equity

changes in the owner’s interest in business for a period of time

owners’ equity equation

assets invested - assets withdrawn + profits earned - losses

statement of cash flows

shows cash inflows and outflows for a period of time

what are the 3 categories of activities

financing, investing, and operating

financing activities

costs of loans and the income from investments

investing activities

purchase and eventual sale of assets

operating activities

any cash payments related with daily operations on the farm

financial statement disclosure (footnotes)

clarifies certain items noted in the financial statements

profitabilty

occurs when total revenue exceeds its expenses

accounting principles

serves as a guideline for how to record info and prepare financial statements

office hours

Mondays and Wednesdays at 11:00 AM – 2:00 PM, & Tuesdays
and Thursdays at 12:30 - 1:30 PM

book we need for class

Agricultural Accounting: Fourth Edition

attendance is for how many points

50

attendance deductions

Any unexcused absence will result in a 5-point deduction, and tardiness will result in a 2.5-point deduction from the attendance score

late work policy

Submitting any of the assignments late will result in a reduced grade of 10% of the assignment’s total points
per day late, max of 2 days to submit

absentee makeup work policy

The absent student must contact the instructor not later than the start of the next class attended in that course to
make arrangements for the make-up work.

exams, quizzes, and homeworks

Two midterm exams (200 points total), One cumulative final exam (100 points), three homework assignments (135 points), Quizzes (15 points)

learning goals

Accurately collect farm business records, Accurately organize farm business records into financial statements; and Demonstrate the principles of accrual accounting by opening, analyzing and entering transactions, and closing a set of double-entry accounting records