Lesson

Understanding Record Keeping

Next Generation Science/Common Core Standards Addressed!

• CCSS.ELA Literacy.RST.11‐12.9 Synthesize information from a range of sources (e.g., texts, experiments, simulations) into a coherent understanding of a process, phenomenon, or concept, resolving conflicting information when possible

Agriculture, Food and Natural Resource Standards Addressed!

• CRP.03.02. Design and implement a personal financial management plan.

– CRP.03.02. Design and implement a personal financial management plan.

Bell Work / Student Learning Objectives

• Understand why records are important for the planning and continuity of an agricultural business.

• Identify the two functions of records.

• Understand the procedure of record keeping.

Terms

• Financial records

• Inventory

• Physical records

Interest Approach

• Calculate your current grade in your agricultural education class. Is this easy to do. What would make this task easer?

• Does calculating your grades in this class relate to grain elevator operator being able to determine the average price paid for the grain in the elevator?

Uses of AgriculturalBusiness Records

• Determine earnings• Determine profit and loss • Determine financial progress or net worth• Determine the profitability of enterprises• Determine where improvements can be made• Assist with planning• Provide information needed for income taxes• Provide information needed to obtain credit• Preserve information for future reference

2 Function of Record Keeping

• 1. For tax purposes. Businesses must keep receipts and cancelled checks in order to complete income tax filing.

• 2. Management information. Includes cost per unit of production, yield per acre, and inventory turnover. Inventory is the number and value of the goods owned by a business. (Inventories are calculated on the first day of the year and the last day of the business year.)(Same process as your SAE record book) They are the goods and materials that are in final product form or used in making the final product.

Surefire steps to insure accurate and usable records

• 1. Study the record keeping system selected before implementing it. (AET system for NM Ag. Ed.)

• 2. Make complete record entries on a regular basis. Include date, quantity, description, and the person or firm with whom transaction occurred.

• 3. Do little business with cash. A checking account will offer cancelled checks as supporting documentation.

• 4. Reconcile the business checkbook and record system monthly. Online banking is immediate reconciliation.

• 5. Keep both financial records, list of money owed and money received, and physical records, list of items owned by the business.

Review

• Why are records are important for the planning and continuity of an agricultural business?

• Identify the two functions of records.

• What are the procedures of record keeping?

AET Records

• The AET record keeping system is available for all Agriculture Education and Agriculture Mechanics students in New Mexico.

• Your instructor has information on accessing the system for use with your business/shop enterprises.

• aettracker.com is the online web based system.

The End!