agri financial statements final

The three types of financial accounting systems are:

1. : cash basis, accrual basis, accrual adjusted approach

An agribusiness firm has $800 in Prepaid Advertising before any adjustments (that is, at the beginning of the year). At the end of the year, an adjusting entry is made to debit the Advertising Expense for $60. The ending balance in the Prepaid Advertising account will be:

800-60=740

1. On December 31, NBC Farm owes an employee four days of work that will not be paid until January 5th. The weekly rate of pay for a five-day workweek is $500. The adjusting entry to record the accrued wages on December 31 will include a:

credit to Salaries Payable for $400.

The owner's interest is popularly referred to as

equity

A livestock farmer sold his livestock in April and did not receive a cash payment from the customer until August. Under accrual-adjusted accounting, the farmer recognizes revenue

in august

A farmer sold his harvest in March and did not receive cash from the customer until July. Under accrual accounting, the farmer recognizes revenue:

in march

a financial statement that provides an overview of the farm's performance during the year.

income statement

When revenues and gains exceed expenses and losses, the difference is reported as

net profit

1. Agricultural operations involve 3 types of financial activities namely:

operating, investing, and financing activities

1. For the following event, select the appropriate journal entry that would be recorded at the end of the year when financial statements are prepared. A farmer determined that his unpaid bills at the end of the year are $880. These bills will not be paid before December 31 when the farm financial statements are prepared. The farmer had no bills at the beginning of the year

Change in Accounts Payable 880 Accounts Payable 880

1. For the following event, select the appropriate journal entry that would be recorded at the end of the year when financial statements are prepared. A farmer determined that she owed $6,500 in real estate and property taxes at the end of the year. She won't pay the taxes before December 31. She owed no taxes at the beginning of the year.

Change in Taxes Payable 6,500 Taxes Payable 6,500

1. Identify the category on the balance sheet (current assets, non-current assets, current liabilities, non-current liabilities, equity) in which each of these items are located. Account receivable Barns Fences Bill owed to a utility company Breeding cattle Cash Feed inventory Tractors Farm vehicles Land and improvements Insurance paid in advance

Current assets Non current assets Non current assets Current liabilities Non current assets Current assets Current asset Non current assets Non current assets Non current assets Cyrrent assets

On which of the following financial statements would you find the following financial statement categories: Assets Equity Expenses Gains Liabilities Losses Revenues

Financial Statement Balance sheet Statement of owners equity/ balance sheet Income statement Income statement Balance sheet Income statement Income statement

financing (F), investing (I), or operating (O) activity: Buying feed Buying a new farm harvester Receiving inheritance for farm use Selling harvested hay Paying the vet bill Paying back borrowed loan Paying personal credit card balance using the farm's credit card

I I I O O F F

T/F Cash-basis does not report inventory

T

T/F The journal entry for the receipt or payment of cash transactions under accrual-adjusted and cash-basis are identical

T

T/F When a farm business earns profit, the owner's equity increases, but if it makes a loss, the owner's equity decreases

T

Which accounting systems does the Farm Financial Standards Council recommend?

accrual adjusted

Under accrual-adjusted accounting, revenue is recorded

after payment/cash is received

that reports the changes in the owner's interest in the farm business during a period

statement of owners equity

T/F The income statement must be prepared before the balance sheet.

t