Record keeping and Journal
What Does Book keeping Mean In Agriculture?
Book keeping is the systematic documentation of all financial transactions within a business. Book keeping is the practice of keeping financial records or accounts of a farm in order to show its expenditures, earnings, and financial position.
Types Of Farm Accounts
1. Cash Accounts: This account includes all incoming and outgoing cash for the farm business.
2. Profit And Loss Account: This type of account illustrates the relationship between the inputs and outputs of the said business. It indicates whether the farm is making a profit, a loss, or breaking even.
The account record has two sides, with expenses on the left and sales revenue on the right.
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Source Document
Source documents are original documents that provide information about transactions that have been recorded.
Types Of Source Documents
- Sales invoice
- Purchase invoice
- Return inward
- Return outward.
1. Sales Invoice: This document is essential for both the seller and the customer. It is a document created by the person selling the goods (the seller) and sent to the customer.
It contains complete information about the goods supplied, including quantity, price, and value, as well as the customer’s name, phone number, and address.
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2. Purchase Invoice: This is a document that contains specific information about the products received by the buyer. It indicates the items purchased, their quantities, and their prices.
3. Return Inwards: These are faulty or incorrect goods that were previously sold to customers but were returned to the business or sellers.
4. Return Outwards: This pertains to the faulty or incorrect goods that the company returns to its suppliers due to certain flaws, reducing the amount owed to them.
Journal Preparation
The journal is the original document for recording all events and all types of business transactions and for recording daily business transactions.
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Types Of Journal
- Sales Journal
- Purchases Journal
1. Sales journal: This is one of the daybooks used to record credit sales of products. This journal is used to record all of the company’s sales. Sales are recorded in the journal for case receipts.
2. Purchases Journal: The Purchases Journal is the primary journal used to record purchased transactions. Only credit purchases of goods are recorded
