Budgeting for Agribusiness

Which of the following is NOT a true statement concerning budgets?

• Are a specific plan on how to spend and save money

• Are numerical records which do not express spending results over a specific time period

• Are a blueprint

• Are used as a planning guide

Which of the following is NOT a benefit of budgeting?

• Setting up emergency funds

• Relying on debt

• Improving credit score

• Establishing a projected goal

Which of the following is a true statement?

• Budgeting allows for raising interest rates

• Budgeting allows for impulse buying

• Budgeting generates a map of financial practices

• Budgeting allows for enhanced debt

A budget helps compare what a person makes to what a person spends.

• True

• False

Which of the following is NOT a true statement?

• With a budget, there is no disciplined approach to keeping spending in line

• Budgeting helps monitor expenditures

• Budgeting is a building block of setting up a farm or ranch

• Spending without budgeting may cause someone to spend money on less important items

Which of the following budgets is usually prepared on a “per unit” basis?

• Whole farm budget

• Enterprise budget

• Partial budget

• Cash flow budget

Whole farm budgets are NOT used for which of the following?

• Comparing profitability of several farm plans

• Determining income possibilities

• Totaling the number of acres

• Learning the worth of a ranch

Which of the following is an example of partial budgeting?

• Totaling acres

• Crop enterprise budget

• Helping the operator analyze important adjustments in the farm operation

• Deciding what crop to plant on a small plot

Which of the following is NOT a true statement about partial budgets?

• Allows for hiring custom work

• Modifies production practice

• Adopts new technologies

• Includes resources which cannot change

What is the purpose of a cash flow budget?

• To determine if available cash and earning will be sufficiently meet expenditures

• To only include resources which will be changed

• To summarize expected income, expense, and profit for enterprise

• To design a general framework for any farmer to evaluate his operation