Organizational behaviour

1. ACCOUNTING
PROCEDURES OF
FISH BUSINESS
ENTITY

2. Intr
duction
• F H'tU flccount1ng 01
accounti11
g practices
ccotu1ru1g
to
lislu.·Lie-,
fol fi hery forn1s js the application of
ope1uion-.. In iect-nt ) e.u-.. con unt•tcinl
fonning ha...been engaging the· tttention ol nrnny and as a u.·..uJLa ntuubc1of
fount LS arc coining up. Corpotttc cntitic
buiness in a big way.
arc entcri11
g into the fiunung
• The exch:u1gc transaction , in the n:ttu1c: of baner, for cx1. .mplt . cxclrnngc of nnin1al
labour fc>l hun1an lnbou1, exchnnge of seeds for output, etc. :ue. 1101n1:llly
1eco1ded at oppo1 n1nity co"t - the p1ice in che open 1na1ket.

3. J n t..
l otional transactions are tho ·e that take place bet·
een the
rncmber of the o·ncr' family and the farin, ''"
ic•ing the f:.nn a
an independen t enuty notionally. ....ome example'i of uch
transact.ion are: u ·e of hou sehokl c<tpital u ·e of land O'ned by
the farm hou chold, labou r pro,-idcd by members of the family,
consu mption of output by the family etc.

4. l)r fitabilit)1 of rop..:
• The performance of each crop "hall be found out ·epara tely. The direct co
t clearly identi fiable 'Vi t h a crop shall be charged
accordingly.
• The com1non cost hould be .uitably allocated on ome accepted
ba"is, For in tance, deprecia tion or rep1'lirs can be di·ided on the
b,t'is of estimation of u"agc by different crop . Intere't on fL cd loan
can be diYided on the ba' i' of lengt h of crop ()Ca on etc.

5. 'l'hc ba ic document needed
recorded in chronological order:
i farm diary, where tran action arc
(1) Ca h book: As the bu .U1co;; it:. Gu ricd on by faanilics it n1ay not lrnxc
tiu1c
!'Ind f C')Otuces for an ("laborntc r tcn1. The butll<'SS is inostly caui<>d on cnsh
bnsis :lnci therefoH'. by p10,·iding analy t ical colu11111 in the c.!lsh book, bot h
on receipts. and payrucnts "tdc, thC'!tccot111Ling C:ln be 1nndc "cry itnplc.
•i11alytical coltu1111 ca-.h book will help che fa1111e1 co do awa) w1cl1 ocher
ubsidiar y books and also thl· ledger and yet he will obtrun all the
info1111ation. he need lo prcp:11c the tinnl account .

6. Double Co lumn - Cash Book
-- O.bit Ii.:. " '•dit
. -
·
- ..
···
..,.. •... ]E-
E-1
]
£..--;"!....., ·
I·
·..·· l!"T"-.
,
l
-Jun-19 To Capltal Ne $1
00.000 $1
00,000 2
·
un-19 Sy Advertisement Ne $500
9--Jun-19 To Sale Ne SlS,000 4·JUn·l9 Sv Purch.llse A/e S1
0.
ooo
1.S-Jun-
19
To Mr.C A/e SU,000 4-1un-19 8v SUtk>nervA/e ssso
21
·
Jun-1
9 To S.nk A/c c SlS,000 1
0.Jun-1
9 Sy Office upen5Ale $200
1
8-Jun-19 Sy Purchase Ne $1
0,000
21 JIJn-19 8y ysh A/r; c SlS,000
30-Jun·t9 Sv Rent A/e $7.SOO
30-Jun-1
9 sv Salarv Ale $1
7,000
30-fon-19 8v 6al. c/d $1
02,250 $78.000
$130.000 $1
11.
000 $13
0,
000 $111
,000
1
-Jul-1
9 8y Bal. b/d $102.25() $78.
000

7. nt..
(2) Debtoi.s and C1t"dit o r Regi,cer, to keep Ctt'dit trnns:ictions.
(1) lock Rt g i cer,,
,·
hich shows input and oncpuc of good . sale. ,,.,, tagc nud
balance ol tock.
f4) ..ix
. ed A -.er Regi tei: contnu1' details of co t of as eL , dep1eciation and
b.tlnucc of a seb.

8. nt..
(5) Lo:1n Rt:"gi ter, c o n t ins 1ecotd o f J
onn..,, dernils of jn re1esr t-tc.
(6) Regisct"r fo1 • ·ocionnl Trnnsnctious io1 1
naking n 1eco1d of tran act1o n
bclwccn Guu1nud hu n1 housd1old.
(i) C o l Jn:tlp-1 tegi te1 io 1 keeping 1eco1ds of each founi.ng acci, icy
, in 01de1
co kilo' the p 10Gt of each gccj,·
ity.

9. t and l cvcnue:
Co t
'1he wocd co ls me lll" e.xp<"n<.follte. ll cC'frc to the monc.-y speuc 011 an it<'lll or fo1 2 "pecific
purr><>'e
or c u-;c
' pit. lco t
•1t r('fers to the ('XpC"nditure incucrt'd on land, bmldmg , ''C'hicks, m:tchint'ries and C'quipmt'nt-., f:um
or fum i..lliralrUctUtt, etc.
•ui,,blc co l
•It j tht'. (;0 C UlCUt1ed Oll an item or input '}uch '"1Uic With thC' lc.-'t•l of Output.
•lanur(', Lime, lt"ttilizt"r, feed, co't of fu1gediug,, fuel, po·er, "age , etc.:Ut" e.x mple of omc
item-. of ' ariablc co l"

10. Fixed Cost
• It is tlh.e cost incurred on an item which does not vary with the level of output.
• It consists of the following five co1
nponents.
• (i) Depreciation
• (ii) In terest on capital
• (iii) Repairs and Maintenance
• (iv) Taxes
• (v) Insurance premium
• The components are denoted as DIRT ! - 5.

11. Cont..
Total cost
•It is tlfie sum of variable and fixed costs.
Junk cost
•It is tlb.e value of an ite1n which has become unfit for use due to wear and tear.
Average cost
•It is total cost divided by total output. It gives the mean cost of producing one unit of the
output.

12. Cont..
Marginal cost
• It is the cost incurred on one more or additional unit of the product.
Opportunity cost
• It is the next best alternative foregone.

13. Fixed, Variable & Total cost calculation for a fish farm
S o u r c e : P r i m a r y D a ta , 2 0 1 7
Variable Cost Structure Tota l Cost
1Year
Tota l Cost 1Cycle
Shri mp Fry 1.9.857.707 6.6 19.236
Adj uvant
a. Feed 130,70 1,000 43.567.000
b. Probiotics 3. 177.5 15 1 .059, 172
c. Ferti l izer· 2.276.5 15 758.838
d. Chal k 32.75 1.700 10.9 17,233
Labor 3 1 .777,45 1 10,592,484
Oil 8.432.353 2,8 10,784
Diesel Fuel 70.183.000 23.394.333
Electricity 26.078.43 I 8.692.8 1 0
1-{a rvcstirng Cost 1 2,894, 1 18 4,298.039
Bon us 6.557.800 2. 185,933
Total 344,687,590 114,895,863
Fiixed Cost Deta i ls Tota l Cost in 1Year Tota l Cost in 1Cycle
Cost of Deprecia ti on 12,97 1 ,0 14 4.323,67 1
Other Costs 6.548.544 2. 182.848
a. Tool Repair 5.192.006 1,730,669
b. Thanksgiving Feast 516.667 172.222
c. La nd Tax 839,87 1 279,957
Tota.I 19,519,558 6,506,519

14. Revenue/ Income:
• It refers to the sale proceeds of a farmer or firm. There could be many sources of income,
apart from the sale proceeds from the products manufactured by a firm.
• Generally income or Total Income of a farm is obtained as follows:
• Total Income = Total Yield (kg) x Unit price
(Rs/per unit of output) Total
Income-Total Cost
• Net In come
• Marginal income is the income obtained from one additional unit of the output.

15. Preparation of Final Accounts:
• Fa.rm final accounts can be p.repa.red according to any of the following two methods:
• 1. Single Entry Method.
• 2. Double Entry Method.

16. Single Entry Method:
• This rnethod does not require maintenance of an elaborate system of
accounting to ascertain the pi:ofit or loss and financial position of the business.
The method requires the prepai:ation of two statements of affaii:s one at the
beginning of the accounting period and the other at the end of the accounting
period.
• The excess of assets over liabilities is the net-worth of the business. The profit
or loss 1nade by the business during a period can be ascertained by comparing the
net-worth of the business on two dates, after 1naki.ng suitable adjustments for
drawings, introduction of additional capital etc.

17. 1 A p r i l 2 0 1 9 S t a r t i n g B a l a n c e f o r W e e k $ 5,0 0 0 .0 0
2 A p r i l 2 0 1 9 In v e n t o r y P u r c h a s e $ 1 4 7 .2 7
3 A p r i l 2 0 1 9 R e n t P a y m e n t $ 2 , 2 5 0 .0 0
5 A p r i l 2 0 1 9 W e e k ly Servic e R e v e n u e s $ 4 , 2 5 2.4 5
6 A p r i l 2 0 1 9 C u s t o m e r R e f u n d P a id $ 7 5 .0 0
7 A p r i l 2 0 1 9 A c c t . In t e r e s t R e c e iv e d $ 8 9 .0 0
7 A p r i l 2 0 1 9 C lo s i n g B a la n c e f o r W e e k $ 6 , 6 9 1 .8 1

18. Double Entry Method:
• Accounting information contained in the accounting records may be presented in the form
of an account for each type of product, for example, Cat fish Account, Shr.imp Account
etc. Each Account is to be debited with opening stock, and the relevant expenses
incurred, and the relevant expenses incurred, and credited with the sale proceeds and the
closing stock.
• The difference between the two sides of each account shows profit or loss. The profit
or loss of each such account is transferred to General Profit and Loss Account, to which
common expenses of all the activities of the farm are chru:ged so as to arrive at net profit or
loss, to be transferred to Capital Account. Finally, Balance Sheet is prepared.

19. 06101 Starting balance for the
we k
$ 5000.00
06102 Rent $1000.00 $ 4000.00
06103 Invoice paid: Excel
Technologies Ltd
$ 500.00 $ 4500.00
06104 Supplies Furniture $1500.00 $ 3000.00
06107 Ending balance $ 3000.00

20. SINGLE ENTRY V/S DOUBLE ENTRY
-- -
Sing_
le I
En t 1
r y' S ystem
D o u ble I
En tr·
y S y s te ,
m I
o It is a m ixture of double entry, one
entry and n o entry
o No subsid iary books, except cash book
is maintained
o Ledger conta ins persona l accounts only
o Preparat ion Tria l Bala nce is not possi
ble
o Only rough estimates of profit or loss
statement of aff airs is ma de
o Bot h debit and credit aspects of all tra
nsactions a re recorded
o Various subsidiary books a re mainta ined
o Ledger contains personal, rea l a nd nom
in al accoun ts
o 'P,repa ration Tria l Bala nce is possible
o Trial Ba lance, Profit/Loss A/c a nd Bala
nce Sheet are
pre pa red 1in a scientific ma nner