Lesson 1Lesson 1

Keeping and Using

SAE Records

Next Generation Science / Common Core Standards Addressed!Next Generation Science / Common Core Standards Addressed!

HSS‐IC.A.1 Understand statistics as a process for making inferences about population parameters based on a random sample from that population. (HS‐LS2‐6)

HSS‐IC.B.6 Evaluate reports based on data. (HS‐LS2‐6)

Agriculture, Food and Natural Resource Standards Agriculture, Food and Natural Resource Standards Addressed!Addressed!

CRP.03.02. Design and implement a personal financial management plan. Sample Measurement: The following sample measurement strands are provided to guide the development of measurable activities (at different levels of proficiency) to assess students’ attainment of knowledge and skills related to the above performance indicator. The topics represented by each strand are not all-encompassing.

– CRP.03.02.01.a. Research and examine components in a personal financial management plan (e.g., income, expense, budgeting, savings, credit, etc.).

Bell WorkBell Work

TermsTerms

Accounts PayableCash Flow

StatementExpense RecordInventoryProfit/Loss

Statement

Accounts Receivable

Depreciation Schedule

Financial StatementProduction RecordsRecord of Receipts

How are the records organized for How are the records organized for the SAE programs?the SAE programs?

Understanding some basic principles and procedures of agricultural accounting will help in setting up the SAE records.

How are the records organized for How are the records organized for the SAE programs?the SAE programs?

A complete record system will provide the necessary information to accomplish the following tasks:–Report information for taxes.–Develop an annual profit/loss

statement.–Account for strengths and

weaknesses of the business.

A complete record system should A complete record system should have the following components:have the following components:

1. Inventory2. Depreciation

Schedule3. Financial

Statement4. Record of

Receipts5. Expense Record

6. Profit/Loss Statement

7. Cash Flow Statement

8. Production records

9. Records of accounts payable/accounts receivable

Inventory Inventory

An inventory is a list of assets on hand and their value at a particular time.–Taking and recording inventories is

one of the first steps in starting a record system.

–A complete inventory includes both quantities and values.

Depreciation ScheduleDepreciation Schedule

A depreciation schedule is a method of distributing the cost of capital items over the life of the asset.

Financial StatementFinancial Statement

A financial statement is a listing of assets, liabilities, and net worth of a business.– It is a picture of the financial position.– It is also called “balance sheets” or

“net worth statements”.

Record of ReceiptsRecord of Receipts

A record of receipts includes a record of cash sales and other receipts, which come into the business during the year.

Expense RecordExpense Record

An expense record will include cash expenses, which were paid during the year.

Profit / Loss StatementProfit / Loss Statement

A profit/loss statement will show how the business has performed financially.

Cash Flow StatementCash Flow Statement

A cash flow statement is a record of the cash generated to meet the demands of the business.

Production RecordsProduction Records

Production records analyze specific enterprises within the business to identify strengths and weaknesses.

Accounts Payable / Accounts ReceivableAccounts Payable / Accounts Receivable

Accounts payable and accounts receivable are records of short-term credit used or extended.

What are the proper procedures to follow What are the proper procedures to follow in making entries in the SAE Records?in making entries in the SAE Records?

There are several major steps to follow in making entries in the SAE records.–Become familiar with the AET Tracker

record book before starting to use it.

–Read carefully all directions and instructions given in the record book.

Steps to follow when making Steps to follow when making entries in SAE Recordsentries in SAE Records

Develop good record keeping habits.

– Make entries regularly.– Set aside time on a regular basis.– Keep records up to date.

Enter complete information for all items.

Five major steps in making entries Five major steps in making entries in a record book during the year.in a record book during the year.

Step 1 –Submit AET introductory info., set up vendors, complete personal information pages

Step 2 - Enter the beginning inventories.–After the first year, the end-of-year

inventory becomes the beginning-of-the-year inventory for the next

year.

Five major steps in making entries Five major steps in making entries in a record book during the year.in a record book during the year.

Step 3 - Enter records of receipts, expenses, and production.–Enter records as they occur.

Five major steps in making entries Five major steps in making entries in a record book during the year.in a record book during the year.

Step 4 - Complete the depreciation schedules for the year.– Bring the depreciation schedules up to date.– Check the “sales of capital items” for

depreciable items that have been sold.– Transfer items to the depreciation schedule.– Calculate the depreciation for the year.– Calculate the remaining cost at the end of

the year.

Five major steps in making entries Five major steps in making entries in a record book during the year.in a record book during the year.

Step 5 - Enter the end of the year inventories.–After making all entries of receipts,

expenses, and production for the year, you are ready to complete the records.

–This is a record of all items on hand at the end of the year, usually December 31.

How do I summarize and analyze the How do I summarize and analyze the information in my SAE records?information in my SAE records?

In completing and summarizing records, check for completeness and accuracy.

Check the livestock numbers and feed and grain quantities.– Check numbers appearing as purchases,

sales, and beginning/ending inventories.– Quantities of feed and grain fed,

purchased, sold, and used for seed must be totaled.

How do I summarize and analyze the How do I summarize and analyze the information in my SAE records?information in my SAE records?

Total and check the expense columns.–The totals of the classifying columns

should check with the total in the “amount paid out” column.

– If hired labor is recorded separately from other expenses, these figures need to be totaled and checked.

How do I summarize and analyze the How do I summarize and analyze the information in my SAE records?information in my SAE records?

Complete and check inventories. Check the depreciation schedules.

– All items in the depreciation schedules should be completed through the “remaining costs at the end of the year” columns.

– Total the columns for “the remaining cost at the beginning of the year”, “the depreciation this year” and “the remaining cost at the end of the year”.

How do I summarize and analyze the How do I summarize and analyze the information in my SAE records?information in my SAE records?

Total the columns for beginning and end-of-year inventories.

Complete a farm business summary to indicate the profitability of the business.

Complete the various business analysis records to determine the measures of efficiency of the operation.

AET TrackerAET Tracker

Each and every student in New Mexico Agriculture Education Classes is provided with access to the AET Tracker record keeping system.

You should begin AET online tutorials at this time!

The End!The End!