2019 State FBM Exam

Which financial statement summarizes financial data for a specific date in time?

• Income statement

• Balance sheet

• Statement of cash flows

• Statement of owners equity

The financial statement that shows the relationship between income and expenses is:

• Income statement

• Balance sheet

• Statement of cash flows

• Statement of owners equity

The net worth balance sheet reveals:

• Owners equity by subtracting total liabilities from total assets

• Net farm income by subtracting total expenses from total revenue

• Cash income by subtracting total cash expenses from total cash receipts

• The increase in retained earnings by subtracting total liabilities from total assets

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

• Monthly bank statement

• Income statement

• Statement of cash flow

• Statement of owners equity

Rate of return on assets is:

• What you get from letting the farm use all your capital assists including equity

• What you have left over once you have paid all debt

• The total of all assets divided by total liabilities

• The percent return on the total amount of money invested in total assets

Which of the following is not included as gross income under the accrual system?

• Value of crops produced

• Increase in value of livestock purchased

• Value of feed fed to livestock

• Government payments and dividends

In preparing an accrual income statement which of the following formulas should be used:

• Beginning inventory minus ending inventory

• Ending inventory minus beginning inventory

• Beginning inventory plus purchases minus ending inventory minus sales

• Ending inventory plus sales minus beginning inventory minus purchases

Return on investments is:

• The net profit or net loss realized from an investment or asset

• Always going to be a positive number

• A number that represents your ability to meet all debt

• Something that agriculture never figures because it is always too low.

Cash on hand on a balance sheet would most closely correspond to which of the following?

• The balance in the farm checking and savings account

• The balance in the farm checking and savings account plus other current assets

• The cash balance in the farm hedging account

• The value of grain inventory stored plus the value of market livestock

Which of the following statements is a true statement about the cash method of accounting?

• Inventories are included as cash

• It is more complicated than the accrual method

• It more accurately reports true net income from the farm

• It reports income and expenses in the period in which they are received or paid