FBM 2021 State FFA Convention Multiple Choice (OA)

If a producer wants to improve working capital, which of these changes will not help?

• Reduce family living withdrawals

• Sell grain and pay off current operating debt

• Reduce cash capital purchases

• Refinance operating debt with long term financing

Which of the following statements about a balance sheet is true?

• The balance sheet shows profitability over time

• The balance sheer provides insight on whether a farm can pay their upcoming obligations

• The balance sheet demonstrates repayment capacity of the farm

• All answers

The deduction on farm taxes related to expensing the purchase cost of machinery and farm buildings over the asset's expected life is called:

• Appreciation

• Operating Cost

• Depreciation

• Expensing

A farmer who wants the right but not the obligation to buy a specific commodity at a specific price level would use a:

• Call option contract

• Hedge to arrive contract

• Cash forward contract

• price later contract

Which asset type does not depreciate

• Machinery and equip.

• land

• titled vehicles

• buildings and improvements

Which of these is often a major drain on working capital?

• Family living expenses

• capital purchases made with cash

• low profitability for the year

• all answers

• none of these answers

Westend poultry Farms, located in the Crabtree's hoe county, raises three million broilers annually. In addition, Westend Poultry Farms owns the mill which provides feed for the birds, owns the processing facility, and markets the dressed birds to retail grocery stores. This type of business is known as:

• Vertical integration

• Horizontal integration

• A marketing cooperative

• A supply cooperative

One of the most important things for a beginning farmer to consider when they start farming is:

• purchasing a farm

• purchasing equipment

• Set goals to help define the direction of the farm

• secure financing

Net worth on a balance sheet is calculated by:

• Subtracting total liabilities from total assets

• Subtracting total expense from total revenue

• Subtracting uses of cash for the year from sources of cash for the year

• None of these answers

Which of the following is not one of the basic farm financial statements?

• Monthly bank statement

• Balance sheet

• Income Statement

• Statement of cash flows