AECN 201 Study Guide - Fall 2018, Comprehensive Midterm Notes - Accrual, Income Statement, Deferral
AECN 201
MIDTERM EXAM
STUDY GUIDE
Fall 2018
Economics: Solving the scarcity problem, getting the most out of limited resources
Management: Leading others to complete a task or goal
Finance: Management of money and funding of operations
Accounting: System or framework for record-keeping
- More land being used per operator in farming and ranching
- Implications of buying new or used or renting
Entrepreneurship: putting land, labor, and capital together in a new way; understanding opportunities
Sales Class
Percent of Farms
Percent of sales
<$50K
75.4
3
$50-100K
6.1
2.3
$100-250K
6.6
5.8
$250-1M
8.1
22.5
>$1M
3.8
66.4
Product Differentiation: market trends, consumer demand, and product diversification
Theory of the Firm: Firms try to maximize profits; Firms behave in a profit seeking way
Perfectly competitive market = zero long-run economic profit
Perfect competition qualities (Price-takers)
- May buyers and sellers
- ID product
- No barriers to entry
- Perfect information
Management: not just being charge; management can (and should) happen at all levels of a firm
Strategic vs Tactical Management
Planning
- Goals, resources, alternatives (production possibilities)
• Internal/external scanning (alternatives don't have to be used just recognized)
- Ho are alternaties helpful een if changes doesn’t occur
Implement
- Where to buy, who to hire
- Due diligence (could be part of implementation process)
- Research of products, prices, and vendors
Control
- Record keeping, analysis
Adjustment
- reviewing implementation, acting on the control phase
Mission Statement: what we do and why we do it
- What do we do?
- How do we do it?
- Whom do we do it for?
- What value are we bringing?
find more resources at oneclass.com
find more resources at oneclass.com
Week 2
Monday, August 27, 2018
8:38 AM
Accounting
External
- Where industry is going
• Competing with all other industries
Internal
- Management decisions to maximize profits
- Quantifying profits and loss (equity)
Types of Accounts
Assets: things of value, tangible or intangible
- Current: less than one year, something that will be turned into cash/used within one accounting
period
• Cash
• Inventory: finished product to be sold
• A/R (Accounts Receivable): A loan extended to someone else
• Prepaid Expenses:
o Prepaid Insurance
- Non-Current: Things that will not be liquidated for greater than one year; something owned to
produce something/make money; often economic capital
• Land
• Buildings
• Equipment
Liabilities: something that is owed (current/noncurrent)
- Accounts payable
• To vendors
• Line of Credit (LOC)
Revenue: Cash or non-cash value of products produced and sold
- Cash/Non-cash
Expenses: Costs that happen because a product is being produced (Cash/Non-Cash)
- Direct: Can be tied directly to units produced
• Labor
• Fuel
- Indirect: Can't be tied directly to units produced
• Insurance
Financial Documents
Balance Sheet
- Accounting Equation (assets - liabilities = owners equity)
Income Statement: Compare revenue and expenses
- Profit/lose statement
Statement of Cash Flows: Looks at cash in and out and why the cash is moving in such a way
- Cash in/out
• Timing of cash in and out
Mission Statements
- Concrete language
- Talk about why
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Economics: solving the scarcity problem, getting the most out of limited resources. Management: leading others to complete a task or goal. Finance: management of money and funding of operations. More land being used per operator in farming and ranching. Implications of buying new or used or renting. Entrepreneurship: putting land, labor, and capital together in a new way; understanding opportunities. Product differentiation: market trends, consumer demand, and product diversification. Theory of the firm: firms try to maximize profits; firms behave in a profit seeking way. Perfectly competitive market = zero long-run economic profit. Management: not just being charge; management can (and should) happen at all levels of a firm. Internal/external scanning (alternatives don"t have to be used just recognized) Ho(cid:449) are alternati(cid:448)es helpful e(cid:448)en if changes doesn"t occur. Due diligence (could be part of implementation process) Reviewing implementation, acting on the control phase. Mission statement: what we do and why we do it.
