MODULE VII

QUALIFICATION TITLE : HORTICULTURE NC II

UNIT OF COMPETENCY : PERFORM POST-HARVEST
OPERATIONS OF FRUIT-
BEARING CROPS
MODULE TITLE : KEEPING FARM RECORDS
AND ACCOUNTS
NOMINAL DURATION : 10 HOURS

WHAT IS THIS MODULE ABOUT?

This module covers the knowledge, skills and attitudes required in

keeping records and accounts.

WHAT WILL YOU LEARN?

Upon completion of this module, you are expected to:

1. Keep farm records and accounts.

WHAT DO YOU ALREADY KNOW?

PRE-TEST:

Answer the following sentences by writing the letter of the correct

answer in your quiz notebook.
1. Costs incurred whether or not production takes place are ________.
a. cash
b. non-cash
c. fixed cost
d. variable cost

2. Which of the items below do farmers usually lack?_______.

a. cash
b. fixed cost
c. non-cash
d. variable cost
3. Which of the following is NOT an example of a variable cost?
a. insecticide
b. fertilizer
c. hired labor
d. land tax
4. Which of the following records shows all the properties and assets
of the fruit grower?
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 a. inventory
b. farm sales record
c. daily expense record
d. record of accounts payable

5. Which of the following farm records refers to the accounts to be

collected from person owing in the business?
a. record of accounts payable
b. miscellaneous record
c. daily expense record
d. record of accounts receivable

6. What is the advantage of keeping records?

a. The farmer knows where his money goes and comes from.
b. Problems that may arise can be solved immediately.
c. It enables the farmer to know if the business is gaining or
losing.
d. all of the above

7. A certain fixed item may become variable. This statement is

________.
a. true
b. complex
c. simple
d. false

8. In computing your income from fruit production, you should

consider the _________.
a. cost of production
b. gross income
c. cost of marketing
d. combination of the three

9. Maintenance and repair of farm equipment falls under ________.

a. inventory
b. daily cash
c. accounts payable
d. miscellaneous expense record

10. The orchard plantation falls under __________.

a. miscellaneous record
b. farm sales record
c. record of accounts payable
d. inventory record

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LESSON 1

KEEP FARM RECORDS AND ACCOUNTS

WHAT IS THIS LESSON ABOUT?

This lesson deals with the different farm records and accounts.

WHAT WILL YOU LEARN?

At the end of the lesson, you should be able to:

1. identify the different kinds of farm records;
2. prepare proper farm records; and
3. recognize the importance of keeping records and accounts.

LET US STUDY

Let us Define

fixed cost – a cost incurred whether or not production takes place

variable cost – a cost which vary depending upon the quantity of
production
non-cash – an item which includes the interest on operating capital,
operator’s labor, and family labor.
It is a must for a farmer to keep up-to-date and accurate records of
his business. It should be made a part of the regular activities in the
farm. Records give instant should information about the status of the
business.
There are many advantages of record keeping. It helps the farmer
to:
1. know where the money goes and where it comes from;
2. enable him to find the weak points in his business;
3. provide him with valuable information for future farm budgeting
and planning;
4. know whether or not the business is losing or gaining from time to
time; and
5. solve problems that may arise.
One primary factor for a farmer to consider and not to neglect for
record keeping is the cost of production of his business. In fruit bearing
crop production, the following classification of costs must be recorded
accurately.

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 1. Fixed costs. Costs incurred whether or not production takes place.
On a yearly basis, the fixed costs in fruit bearing crop production
would include land tax, government irrigation fee, depreciation and
interest charges on equipment such as tractor or irrigation pump
and the maintenance cost of work animals.
2. Variable costs. Costs vary depending on the quantities of
production. Land rent is a variable cost if there is shared
management. Seeds, fertilizers, insecticides, and hired labor are
also examples of variable costs.
3. Cash. This is the item that most farmers lack, especially before
starting the venture. Farmers result to borrowing money from
various sources to cover expenses for crop production. Interest of
borrowed money is considered cash. Hired labor is classified under
cash.
4. Non-cash. This refers to the interest on operating capital, if the
capital is not borrowed. Likewise, the farmer’s labor and family
labor are non-cash costs.
The kind of farm records to keep will depend upon what the farmer
wants to know about his business. The records should:
1. show the financial status of the business;
2. show whether the business is gaining or losing; and
3. help in determining which farm practices pay most.
The following records are recommended to farmers:
1. Inventory record refers to all the resources, especially property,
assets and others.
2. Record of accounts receivable consists of all the accounts to be
collected from persons owing the operator under certain terms and
conditions.
3. Record of accounts payable refers to all the accounts to be paid
by the farmer-operator to persons or firms for the resources that
are used in operating the business.
4. Daily cash expense record pertains to all the daily major
expenses incurred in the business operation.
5. Sales record is a record of all goods and products that are being
sold to consumers, be it in small or in large scale.
6. Miscellaneous expense record refers to the record of all
miscellaneous expenses incurred in operating the business, such
as maintenance and repairs, taxes and rent, interest of borrowed
money, and others.

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Formats in Preparing Farm Records

A. Inventory Record

Beginning Ending
Inventory Inventory
Date Date
ITEM Description Ownership No. Value No. Value

TOTAL

B. Record of accounts receivable

DATE
Person or Firm Owing You Acquired Due Amount Terms

TOTAL

C. Record of accounts payable

BEGINNING OF YEAR ENDING OF YEAR

Person or DATE Person or DATE
Firm You Amount & Firm You Amount &
Owe Acquired Due Terms Owe Acquired Due Terms

TOTAL

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 D. Daily cash expense record

Date Quantity Seeds Fertil Insec Weedicide Hired Labor Fue Food Transp Fees Other
Descriptio izers ticide s man Value l& ortatio s
n and s days Oil n
Unit Price

TOTAL

E. Miscellaneous expense record

Date Quantity Maintenance Taxes Interest Others TOTAL

Description and Repairs and Other
and unit Rent
Price

TOTAL

F. Summary of expenses and receipts

EXPENSES: VALUE (₧.)

CASH
Seeds ____________
Fertilizers ____________
Insecticides ____________
Herbicides ____________
Hired Labor ____________
Fuel and oil ____________
Fees ____________
Food ____________
Transportation ____________
Maintenance & Repairs ____________
Taxes and rent ____________
Interest ____________
Others ____________
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 ____________
A. Total Cash Expenses ____________

NON-CASH
Landlord’s share _____________
Services paid in kind _____________
Seeds produced &
used in the farm _____________
Unpaid family labor _____________
Depreciation _____________
Others _____________
B. Total Non-Cash Expenses _____________

C. Total Expenses (A& B) _____________

RECEIPTS
D. Total Cash Receipts _____________
E. Total Non-Cash Receipts _____________
F. Total Receipts (D&E) _____________

NET INCOME :
G. Net Cash Income (D-A) _____________
H. Net Non-Cash Income (E-B) _____________
I. Total Net Income (G & H or (F & C) _____________

LET US REMEMBER

It is a must for every farmer or producer to keep all the necessary

farm records and accounts of his venture. By doing so, he will be
updated with the current status of the business, particularly in the
financial set-up of his business.

HOW MUCH HAVE YOU LEARNED?

Answer the following questions by writing the letter of the correct

answer on your notebook.
1. Which of the following records show all the assets and properties
owned by the operator?
a. inventory
b. sales record
c. record of accounts payable
d. miscellaneous record
2. Costs incurred whether or not production takes place are _______.
a. variable
b. cash
c. non-cash
d. fixed
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 3. The item that most farmers usually lack of is ____________.
a. fixed costs
b. cash
c. non-cash
d. variable costs
4. A farm record which refers to all the daily expenses incurred in the
business operation is called _________.
a. production record
b. farm sales record
c. daily expense record
d. miscellaneous expense record
5. Which of the following is not an example of a fixed cost?
a. land tax
b. irrigation fee
c. maintenance cost of farm equipment
d. hired labor

LET US APPLY WHAT YOU HAVE LEARNED

Given the following information written inside the box. Prepare a

record of accounts receivable by writing the necessary information on
their respective columns in the table. Follow the format that you have
learned.
Phil. Fruit and Vegetable Corp.
April 01, 2008
Oct. 31, 2008
Php 10,000.00 at 2% interest/month
ACCOUNTS RECEIVABLE
DATE
Person or Firm Owing You Acquired Due Amount Terms

TOTAL

RESOURCES

reference
farm records

REFERENCE

Cheah Kok Kheong et.al. Modern Agriculture for Tropical Schools Oxforn
University Press: 1979
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POST TEST

Answer the following sentences by writing the letter of the correct

answer in your quiz notebook.
1. Costs incurred whether or not production takes place are ________.
a. cash
b. non-cash
c. fixed cost
d. variable cost
2. Which of the items below which farmers usually lack?_________.
a. cash
b. fixed cost
c. non-cash
d. variable cost
3. Which of the following is NOT an example of a variable cost?
a. insecticide
b. fertilizer
c. hired labor
d. land tax
4. Which of the following records shows all the properties and assets
of the fruit grower?
a. inventory
b. farm sales record
c. daily expense record
d. record of accounts payable
5. Which of the following farm records refers to the accounts to be
collected from person owing in the business?
a. record of accounts payable
b. miscellaneous record
c. daily expense record
d. record of accounts receivable
6. Which of the following is an advantage of keeping records?
a. The farmer knows where his money goes and comes from.
b. Problems that may arise can be solved immediately.
c. It enables the farmer to know if the business is gaining or
losing.
d. all of the above
7. A certain fixed item may become variable. This statement is
_________.
a. true
b. complex
c. simple
d. false
8. In computing your income from fruit production, you should
consider the __________.
a. cost of production
b. gross income
c. cost of marketing
d. combination of the three
9
9. Maintenance and repair of farm equipment falls under __________.
a. inventory
b. daily cash
c. accounts payable
d. miscellaneous expense record
10. The orchard plantation falls under __________.
a. miscellaneous record
b. farm sales record
c. record of accounts payable
d. inventory record

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