2022 MN state exam

Inflation can be described as:

• A. An increase in the price of goods, money has decreased purchasing power.

• B. A decline in the price of goods, money has increased purchasing power.

• C. A slow level of economic growth, with above average unemployment

• D. A and C.

Accrual adjusted income is cash income adjusted for changes in ______.

• a. Checkbook balances

• b. Inventories

• c. Land values

• d. All of the above

Liquidity ratios are calculated using information from which financial statement(s)?

• a. Balance Sheet.

• b. Income Statement.

• c. Statement of Cash Flows.

• d. All of the above.

Depreciation is the accounting method used to deduct the cost of a business ______ over its useful life.

• a. Liability

• b. Expense

• c. Sale

• d. Asset

5. The cost to produce a bushel of corn on an acre of land will _______ as yield increases.

• a. Increase

• b. Decrease

• c. Stay the same

• d. These are unrelated

A(n) _________ policy is purchased by farmers to help protect their machinery, equipment,

livestock, grain, and other farm assets from losses.

• a. Bank

• b. Government

• c. Insurance

• d. None of the above

Hedging is defined as taking ________ positions in the cash and futures market.

• a. Cash

• b. New

• c. Opposite

• d. Strong

Which of the following is not one of the 5 C’s of credit that lenders use to evaluate loan

requests?

• a. Certification

• b. Character

• c. Collateral

• d. Capacity

What tax form is used to report farm income and expenses?

• a. Form 1040

• b. Form 4562

• c. Schedule F

• d. Schedule C

• e. None of the above

What type of insurance do employers carry to help cover the medical costs and lost wages for

an employee that is hurt on the farm?

• a. Property

• b. Revenue

• c. Disaster

• d. Workers’ Compensation