Topic 4 - Physical records Flashcards
Explain the purpose of livestock and crop schedules
The purpose of livestock and crop schedules is to facilitate the accurate identification of the sources and uses of livestock and crop items (grain, hay, etc), on an enterprise by enterprise basis, which have occurred throughout the year. The schedules will therefore also explain changes which have occurred in the livestock and crop products (grain, hay, etc) physical quantities throughout the year.
The purpose of inventory schedules for non agricultural production businesses is to record the sources, uses and on hand quantities of the particular item throughout the year. The schedules also facilitate the valuation of the inventory on hand at any particular point in time throughout the year, although normally the interest will be on the beginning and end of year quantities and their value.
List the items contained in the following:
- Livestock schedule
- Class of stock
- The beginning of year (opening) number, per head value and total value of each class of stock
- Purchases: the number and cost
- Transfers in: number and source
- Births (natural increase): number
- Total sources: number
- Deaths/Rations: number
- Transfers Out: number and destination
- Sales: number and value
- The end of year (closing) number, per head value and total value of each class of stock
List the items contained in the following:
- Crop schedule
- Item
- The beginning of year (opening) number, per unit value and total value of the item
- Purchases: quantity and cost Production: quantity
- Total sources Losses: quantity
- Seeds used: quantity
- Fed Out: quantity
- Sales: quantity and value
- The end of year (closing) quantity, per unit value and total value of item
Explain your understanding of the following:
- ‘transfers in’
refer to the number of stock placed into this class from another class within the enterprise or from another enterprise on the same property.
Explain your understanding of the following:
- ‘transfers out’
refers to the number of stock taken out of this class and placed into another class within the same enterprise or placed into another enterprise.
Explain your understanding of the following:
- ‘rations’
refers to the stock which have been slaughtered and the meat consumed by the employees and/or owners of the business.
Explain your understanding of the following: -
- ‘seeds used’
refers to the quantity of seed (grain) used to sow/plant a new crop.
Explain your understanding of the following:
- ‘fed out’
refers to the quantity of grain which has been fed to one or more livestock enterprises.
Why is it useful to calculate the totals for each column in a livestock schedule?
It is useful to calculate the total for each column in a livestock schedule because it is these total which can then be transferred direct to the livestock trading account. If you don’t calculate these totals at the time of completing the schedule, you will need to do so when completing the trading account.
Should the transfers in and transfers out in an enterprise livestock schedule always equal each other?
Transfers in and transfers out in an enterprise livestock schedule do not always have to equal each other. If there is more than one enterprise with the same type of livestock (e.g. sheep) there may be transfers between the enterprises and thus the transfers in and out within the one enterprise will be different quantities. In this scenario, the total transfers in for the combined enterprises would have to equal the total transfers out for the combined enterprises. If there is only one enterprise with a particular type of livestock (e.g. sheep) and transfers occur, then the transfers ion and out must equal each other.
What are the sources of information when deriving livestock and crop schedules?
The sources of information will be the physical records, including the manager’s diary, maintained within the business. Purchase and sales invoices will also represent sources of information.
Which other components of the financial analysis utilise the information contained within livestock and crop schedules.
The other components of the financial analysis which utilise the information contained within livestock and crop schedules, and non agricultural inventory schedules are as follows:
• Trading accounts
• Closing balance sheet
In addition it should be noted that some information in these schedules should also correspond to information in the opening balance sheet (beginning of year values) and the cash flow statement (value of purchases and sales).
