2018 quiz Farm Business Management

Which financial statement reports farm revenues minus farm operating and financial expenses over an accounting period?

• Balance sheet

• Statement of owner equity

• Statement of cash flows

• Income statement

The original cost basis of an asset plus the cost of any improvements or alterations that extends the life of the asset less accumulated depreciation or depletion on the asset is referred to as the:

• Net cost value of the asset.

• Net market value of the asset.

• Adjusted basis or cost value of the asset.

• Total amortization value of the asset.

A management tool where a person compares two different production options or practices, and then compares estimated income and expenses to identify the better option or practice is a/an:

• Partial budget.

• Cash flow projection.

• Enterprise budget.

• Whole farm budget.

When determining the effect of growing more acres of a crop, the cost most likely to change would be:

• Operating costs per acre.

• Fixed costs per acre.

• Rent per acre.

• Crop insurance per acre.

For a livestock budget to be meaningful, what value should be placed on raised crops fed?

• The costs to produce these crops

• Local market value

• The future value of these crops

• Reported state average sale price

A statement of projected costs and returns associated with one’s production process, usually for one production period, is called the:

• Cash flow projection.

•  Enterprise budget.

•  Total farm budget

• Partial budget

The most common theme of federal government programs has been to:

• Lower production.

• Have a food reserve.

• Provide price support.

• Fund research activities.

Which farm business entity is not taxed and each owner’s share of income is taxable and is subject to self-employment tax as well a federal income taxes?

• Partnership

• LLC

• S-Corporation

• C-Corporation

When a farmer increases his investment in land, buildings, and equipment without increasing the total units of production, his cost per unit:

• Increases.

• Remains the same.

• Decreases.

• Varies with the operator.

What is amortization?

• The ability to get a loan from the bank.

• Paying off debt with a varying repayment schedule.

• Paying off debt with a fixed repayment schedule.

• The ability to repay a loan from the bank.