792-178 Management Accounting

Credit Points

HECS Band

Coordinator

Semester

Contact

Subject Description

The objective of this subject is to extend participants' ability to:

• explain the purpose of farm management accounting;

• distinguish between different accounting systems;

• complete the necessary financial records for a farm business;

• set up and complete a cashbook for financial and taxation purposes;

• prepare bank reconciliations;

• construct livestock and commodity trading accounts;

• explain and calculate different methods of depreciation;

• prepare a properly classified profit and loss statement for the year;

• prepare a properly classified balance sheet;

• perform and analyse simple business rates/ratios from the profit and loss statement and the balance sheet.

The content includes: Identification of physical and financial inputs and the role of farm records in the decision making process; establishment of inventories of farm inputs; construction of trading statements to calculate profit from trading; operation schedules to calculate the cost allocation of plant and machinery; the petty cash system as a method of cash control in the business; the use of the cashbook as the major journal, cash book design and the handling of difficult transactions in a cashbook; banking reconciliations to establish cash position with trading accounts; the profit and loss statement and balance sheet as financial recording measures of business performance and their use; calculation of equity, return to equity, return to capital as terms of business analysis; comparative analysis as a measure of business performance.

Assessment

Two cashbook assignments (60% and 40%).

Prescribed Texts

• Randell G, Trapnell L and Fisher W, Farm and Small Business Record Book. Victorian Department of Agriculture, Melbourne (1993).