BASICS OF FARM ACCOUNTING Worksheet
1. What educational website offers a tremendous amount of agricultural
financial information?
a) ISU AgEd b) Ag Decision Maker
c) Ask Jeeves d) Iowa FFA
2. What is typically the #1 response listed for: “why keeping records?”
a) management decisions b) documenting costs/returns
c) income tax reporting d) environmental regulations
3. What are the two level s of records that a farmer should keep?
a) net worth & crop yields b) financial & production
c) income & expenses d) births/deaths
4. What is an example of a Fiscal Year?
5. About what % of farmer use the “Cash Method” of Accounting?
a) 65% b) 75% c) 85% d) 95%
6. The major difference between Cash and Accrual Method is that Accrual has
what additional component?
a) weights & bushels b) inventory
c) balance sheet d) all of the above
BASICS OF FARM & SMALL BUSINESS ACCOUNTING ( Worksheet continued)
7. Double entry accounting transactions requires?
a) details & complexity b) income & net worth statements
c) debits & credits d) time & money
8. What is the method of accounting that is a combination of the Cash &
Accrual Methods called?
a) Adjusted Cash b) Modified Cash
c) Adjusted Accrual d) Modified Accrual
9. What “Record Keeping Phase” do most people start with?
a) keeping & using inventories b) recording livestock records
c) analyzing the business d) recording receipts & expenses
10. Monthly what is probably one of the most important record keeping
procedures that should be done?
a) print off a check register b) reconcile to the bank statement
c) identify bushel & pounds d) determine profitable enterprises
11. Record keeping steps start with?
a) entering income & expenses b) settling up bank & loan balances
c) entering beginning inventories d) all of the above
12. Good records are essential to what?
a) efficient management b) financial progress
c) enterprise profitability d) all of the above
BASICS OF FARM ACCOUNTING Answer Sheet
1. What educational website offers a tremendous amount of agricultural
financial information?
b) Ag Decision Maker
2. What is typically the #1 response listed for: “why keeping records?”
c) income tax reporting
3. What are the two levels of records that a farmer should keep?
b) financial & production
4. What is an example of a Fiscal Year? 10/1/08 – 09/30/09 (any beginning month date and any ending month date at the end of 11 months later)
5. About what % of farmer use the “Cash Method” of Accounting?
d) 95%
6. The major difference between Cash and Accrual Method is that Accrual has
what additional component?
b) inventory
7. Double entry accounting transactions requires?
c) debits & credits
8. What is the method of accounting that is a combination of the Cash &
Accrual Methods called?
b) Modified Cash
9. What “Record Keeping Phase” do most people start with?
d) recording receipts & expenses
10. Monthly what is probably one of the most important record keeping
procedures that should be done?
b) reconcile to the bank statement
11. Record keeping steps start with? d) all of the above
12. Good records are essential to what? a) efficient management