Bookkeeping & Recording Transactions JSS3 Agricultural Science Lesson Note

TOPIC: BOOKKEEPING

Bookkeeping is the recording, on a day-to-day basis, of the financial transactions and information pertaining to a business. It ensures that records of individual financial transactions are correct, up-to-date, and comprehensive. Accuracy is therefore vital to the process.

Bookkeeping provides the information from which accounts are prepared. It is a distinct process that occurs within the broader scope of accounting.

Each transaction, whether it is a question of purchase or sale, must be recorded. There are usually set structures in place for bookkeeping that are called ‘quality controls’, which help ensure timely and accurate records.

Recording transactions

In principle, transactions must be recorded daily in the books or the accounting system.

For each transaction, there must be a document that describes the business transaction. This could include a sales invoice, sales receipt, supplier invoice, supplier payment, bank payments, and journals.

These accompanying documents provide the audit trail for each transaction and are an important part of maintaining accurate records in the event of an audit.

TOPIC: Farm Records

Content

Farm records are written accounts of work expenses and income in farming enterprises. 

Importance of Farm records

1.   Farm records enable the farmer to make proper returns to the boards of internal revenue for correct tax assessment
2.   It provides the farmers with a clear idea of how much money is coming in and how much it is wise to spend
3.   It enables the farmers to know whether he is making a profit or a loss
4.   It helps the farmer to obtain loans and subsidies from the government
5.   It helps the farmers to make budgets and plan their business
6.   It enables the farmers to make good management and decision