Presentation on theme: "What kinds of records should businesses keep? Assets Liabilities Net worth Profit and loss statement Cash receipts Non-cash receipts Invoice."— Presentation transcript:
What kinds of records should businesses keep? Assets Liabilities Net worth Profit and loss statement Cash receipts Non-cash receipts Invoice
Assets Things that one owns and completely pays for. Example: Your car after all payments have been made.
Assets Current Assets-items quickly converted to cash or that will be sold within 12 months cash checking savings stocks or bonds
Assets Non-current-items that have a useful life or more than one year land machinery breeding livestock
Liabilities Things that you owe money to other people for or debts Example: My Visa
Liabilities Current-debts that are due to be paid this year fertilizer and feed bills tractor and building payments part of the mortgage due this year Non-Current-debts not due this year mortgages not due this year
Net Worth One’s assets minus their liabilities. You have $3000 in the bank, but you owe $1750 for your bills. Your net worth is $1250.00.
Net Worth Current Assets + Non-Current Assets=Total Assets Current Liabilities + Non-Current Liabilities=Total Liabilities
Inventory An itemized list of things owned by a business with the beginning value and depreciated value
Inventory Non-depreciable-items that will be used or sold within a year feed supplies
Inventory Depreciable-items that have a useful life of more than one year and lose value because of age, wear or becoming out-of date because of technology advancements. Land is NOT depreciable property tractor computer chainsaw
Profit and loss statement A financial statement of a business that reports the profit made by the business or the losses incurred.
Cash receipts Cash that is paid for services or merchandise.
Non-Cash receipts Payment for services in other ways than cash.
Invoice Shows items and prices for things that have been bought from a certain business.
Other business records Labor Materials Travel
Debt-to-Equity Ratio Used by banks and lending institutions to decide whether or not to lend money to specific people or businesses Debt-to-Equity Ratio = Total Liability Net Worth