There are no prerequisites.

Course Description

This course addresses every aspect of the accounting that one might encounter in a farm, ranch, or related business. The intent is to not only explain accounting concepts, but also to provide examples and show how an accounting system can be constructed and operated. The course pays particular attention to unique aspects of agricultural accounting that are not encountered in other industries, including special valuation rules for inventory, hedging transactions, dealing with cooperatives, and recording non-current farm assets.


Steven M. Bragg, CPA

Steven M. Bragg, CPA, is a full-time book and course author who has written more than 70 business books. He provides Western CPE with self-study courses in the areas of accounting and finance, with an emphasis on the practical application of accounting standards and management techniques. A sampling of his courses include the The New Controller Guidebook, The GAAP Guidebook, Accountants’ Guidebook, and Closing the Books: An Accountant’s Guide. He also manages the Accounting Best Practices podcast.

Steven has been the CFO or controller of both public and private companies and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He holds an MBA from Babson College, a Master of Finance from Bentley College, and a BA from the University of Maine (summa cum laude).

Course Specifics

Aug 22, 2019
There are no prerequisites.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Recognize the different accounting principles
  • Cite the line items and classifications used within the financial statements
  • Note the differences between financial and managerial accounting

Chapter 2

  • Note the differences between cash basis and accrual basis accounting
  • Identify the concepts behind the accrual-adjusted approach

Chapter 3

  • Note the types of source documents for an accounting system
  • Recognize how assets and liabilities are classified within the balance sheet
  • Recognize the structure used in the chart of accounts

Chapter 4

  • Identify the different types of accounting transactions and how they are recorded
  • Recognize the characteristics of contra accounts and note how they are used

Chapter 5

  • Note the methods used to derive the allowance for doubtful accounts

Chapter 6

  • Note the different classifications of securities
  • Recognize how the other comprehensive income classification is used
  • Note the calculation for the net proceeds from the sale of an investment

Chapter 7

  • Recognize the issues with using the periodic inventory system
  • Identify the calculation for net realizable value and when this valuation can be used

Chapter 8

  • Identify the components of a depreciation calculation, and how the mid-month convention can be used in calculating depreciation
  • Cite the calculations used for the accelerated depreciation methods
  • Note the entry used to record the disposal of a fixed asset

Chapter 9

  • Identify the investments that are considered to be permanent land developments
  • Recognize the costs incurred in the development of non-current assets
  • Note the different types of intermediate-life plants and how their costs are classified

Chapter 10

  • Recognize the methods used to create supplier identification numbers
  • Note the structure of the Form 1099-MISC and its parts

Chapter 11

  • Recognize the reasons for reconciling loan accounts

Chapter 12

  • Cite the circumstances under which a tax position is recognized
  • Note the tax rate used in interim reporting periods

Chapter 13

  • Note the process flow for using the other comprehensive income classification
  • Recognize the different types of hedging transactions
  • Recognize the nature of a highly effective hedge and its effect

Chapter 14

  • Identify the types of cooperatives
  • Note the recognition criteria for patronage refunds and sales to cooperatives

Chapter 15

  • Recognize the unique aspects of loans from the Commodity Credit Corporation

Chapter 16

  • Identify the different types of entries used when closing the books
  • Identify how the income summary account is used
  • Note the analysis methods used to review preliminary financial statements

Chapter 17

  • Recognize the different types of disclosures that should be attached to farm financial statements

Chapter 18

  • Define the different classifications of ratios
  • Identify the calculations used for each of the farm analysis ratios

Table of Contents

Chapter 1 – Introduction to Agricultural Accounting

Learning Objectives


A Note on Terminology

The Economic Entity Concept

Financial Statements

Format of the Financial Statements

Income Statement

Statement of Owner’s Equity

Balance Sheet

Statement of Cash Flows

Financial Statement Disclosures

Construction of Financial Statements

Additional Commentary on the Financial Statements

Profits vs. Cash Flows

Accounting Principles

The Certified Public Accountant

Accounting Standard-Setting Organizations

Financial Accounting and Managerial Accounting


Chapter 1 – Review Questions

Chapter 2 – Accrual and Cash Basis Accounting

Learning Objectives


Cash Basis of Accounting

Accrual Basis of Accounting

Accrual-Adjusted Approach

Converting Cash Basis to Accrual Basis Accounting


Chapter 2 – Review Questions

Chapter 3 – Accounts

Learning Objectives




The Chart of Accounts

Account Descriptions

Double Entry Accounting

The Accounting Equation

Journal Entries

The Trial Balance


Chapter 3 – Review Questions

Chapter 4 – Accounting Transactions

Learning Objectives


Financing Activities

Owner Investments

Associated Liabilities

Owner Withdrawals


Investing Activities

Asset Acquisitions

Asset Sales

Asset Exchanges

Asset Leases

Investments in Perennial Crops

Operating Activities

Purchases of Market Livestock and Crops

Annual Costs for Producing Perennial Crops

Feed Purchases

Supplies Purchases

Billed Expenditures

Prepaid Expenses



Sale of Farm Products

Receipt of Payment from Customers

Crop Insurance Proceeds


Chapter 4 – Review Questions

Chapter 5 – Receivables Accounting

Learning Objectives


The Billing Process

The Invoice

Cash Sales

The Accounts Receivable Aging Report

Estimation of the Allowance for Doubtful Accounts

Accounting for the Allowance for Doubtful Accounts

The Direct Write-off Method

Negative Bad Debt Expense


Chapter 5 – Review Questions

Chapter 6 – Investment Accounting

Learning Objectives


Types of Investments

Investment Classifications

The Realized and Unrealized Gain or Loss

Other Comprehensive Income

Purchase and Sale of Investments

The Gain or Loss Calculation

Conversion of Securities

Sale of Securities

Accounting for Dividends and Interest Income

Stock Dividends and Stock Splits

Ongoing Accounting for Investments

The Fair Value Option


Chapter 6 – Review Questions

Chapter 7 – Inventory Accounting

Learning Objectives


Accounting for Inventory – at Period-end

Summary of Inventory Valuation Rules

Accounting for Inventory - Feed

Purchase of Feed for Internal Use

Purchase of Feed for Resale

Raised Feed for Internal Use

Accounting for Inventory – Crops

Purchase of Crops for Resale

Growing Crops

Raised Crops for Sale

Accounting for Inventory - Livestock

Purchase of Market Livestock for Resale

Raised Market Livestock for Sale

Livestock Products

Inventory Co-Mingling


Chapter 7 – Review Questions

Chapter 8 – Fixed Assets and Depreciation

Learning Objectives


The Nature of Fixed Assets

The Initial Measurement of a Fixed Asset

Lump-Sum Purchases

The Purpose of Depreciation

Depreciation Concepts

Accelerated Depreciation

Sum-of-the-Years’ Digits Method

Double-Declining Balance Method

Straight-Line Method

Units of Activity Method

MACRS Depreciation

The Depreciation of Land

The Depreciation of Land Improvements

Depreciation Accounting Entries

Accumulated Depreciation

Asset Disposal Accounting

Impairment Write-downs


Chapter 8 – Review Questions

Chapter 9 – Non-Current Farm Assets

Learning Objectives


Trees and Vines

Intermediate-Life Plants

Valuation of Raised Breeding Livestock

Special Poultry Considerations

Animal Cost Tracking

Base Value Method

Non-Current Investments


Chapter 9 – Review Questions

Chapter 10 – Payables Accounting

Learning Objectives


Accounting for Accounts Payable

Early Payment Discounts

The Vendor Master File

Vendor Master File Usage

Supplier Naming Conventions

The Payables Filing System

Government Reporting

The Form 1099-MISC

Treatment of Incorrect Filings

The Form W-9


Chapter 10 – Review Questions

Chapter 11 – Debt Accounting

Learning Objectives


Basic Debt Accounting

The Amortization Schedule

Reconciling the Debt Account


Chapter 11 – Review Questions

Chapter 12 – Income Taxes

Learning Objectives


Overview of Income Taxes

Accounting for Income Taxes

Tax Positions

Deferred Tax Expense

Applicable Tax Rate

Interim Reporting


Chapter 12 – Review Questions

Chapter 13 – Derivatives and Hedging Transactions

Learning Objectives


The Nature of a Derivative

The Nature of a Hedge

Other Comprehensive Income

Derivative Accounting

Hedge Accounting - General

Hedge Accounting – Fair Value Hedges

Hedge Accounting – Cash Flow Hedges


Chapter 13 – Review Questions

Chapter 14 – Cooperative Accounting

Learning Objectives


Cooperative Accounting

Inventory Accounting

Earnings Allocations

Loss Allocations


Presentation Issues

Patron Accounting

Deliveries Made to Marketing Cooperatives

Inventory Delivered to a Marketing Cooperative

Advances from a Marketing Cooperative

Accrual of Patronage Refunds


Chapter 14 – Review Questions

Chapter 15 – Revenue Recognition

Learning Objectives


Effects of Inventory Valuation using Net Realizable Value

Government Programs

Sales to Cooperatives

Commodity Credit Corporation Loans

Forward Contracts


Chapter 15 – Review Questions

Chapter 16 – Financial Statement Preparation

Learning Objectives


The Accruals Concept

Adjusting Entries

Reversing Entries

Common Adjusting Entries

Accrued Expenses

Accrued Revenue

Allowance for Doubtful Accounts

Prepaid Expenses

Unpaid Taxes

Create Customer Invoices

Reconcile the Bank Statement

Calculate Depreciation

Close Accounts Payable

Review Journal Entries

Reconcile Accounts

Close Subsidiary Ledgers

Review Financial Statements

Accrue Tax Liabilities

Close the Month

Add Disclosures

Issue Financial Statements


Chapter 16 – Review Questions

Chapter 17 – Financial Statement Disclosures

Learning Objectives


Disclosure of Accounting Policies

Basis of Accounting

Nature of Operations

Use of Estimates

Basis of Combination

Cash and Cash Equivalents

Trade Accounts and Other Receivables

Basis of Inventory Valuation

Revenue Recognition

Income Taxes


Disclosure of Inventory

Disclosure of Raised Dairy and Breeding Livestock

Disclosure of Fixed Assets

Disclosure of Deferred Income Taxes

Balance Sheet

Income Statement

Disclosure of Short Term Notes Payable

Disclosure of Long-Term Debt

Disclosure of Pension Plans

Disclosure of Investments in Cooperatives

Disclosure of Dealings with Cooperatives


Chapter 17 – Review Questions

Chapter 18 – Farm Financial Analysis

Learning Objectives


Horizontal Analysis

Financial Ratio Analysis

Performance Ratios

Net Profit Ratio

Operating Income Ratio

Quality of Earnings Ratio

Breakeven Point

Efficiency Ratios

Asset Turnover Ratio

Working Capital Turnover

Liquidity Ratios

Current Ratio

Cash Ratio

Debt to Equity Ratio

Debt Service Coverage Ratio

Capital Debt Repayment Capacity

Return on Investment Ratios

Return on Equity

Return on Assets

Net Farm Income


Livestock Analysis Formulas


Chapter 18 – Review Questions

Review Question Answers and Rationales



Final Examination

Answer Sheet

Course Evaluation

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