WorksheetsFBM Knowledge Questions
Total questions: 122
Worksheet time: 10hrs 10mins
Successive increases in irrigation water used per acre of potatoes results in smaller and smaller increases in potato production. This illustrates:
Profit Maximization
The Law of Supply and Demand
Opportunity Cost
The Law of Diminishing Marginal Returns
None of the above
Accrued interest on a balance sheet refers to:
Interest that is past due
Interest that has accumulated since the last loan payment
Interest on a short-term debt
Interest that is forgiven by the lender
None of the above
Following monetary casing policies by the Bank of Japan, the Japanese Yen has weakened considerably against the U.S. dollar. What is the outlook for Washington agricultural trade with Japan?
Exports from WA decrease, Japan imports to U.S. increase
Japan imports to U.S. decrease, WA exports to Japan increase
No expected change
WA exports increase, imports from Japan to WA increase
None of the above
Which of the following shows the physical and financial plan for the entire farm business for a specific period of time?
Partial Budget
Cash Flow Budget
Whole Farm Budget
Enterprise Budget
None of the above
In order to reduce crop risks to the farm business, a farm owner might do all of the following except:
Buy a December put option for feeder cattle to cross hedge corn price
Plant several different crops in the farm's grain production rotation
Purchase crop insurance for grain production enterprises
Forward price contract for the sale of crop commodities
All of the above are effective risk management strategies
The economic concepts of Marginal Revenue and Marginal Cost are used to determine the profit maximizing output level in the production process. If total returns exceed total costs of production, then profits will reach their maximum when:
Marginal Revenue is at max and Marginal Cost is at min
Marginal Revenue equals Marginal Cost
Marginal Revenue is greater than per unit cost of production as measured by Marginal Cost
Marginal Revenue is at min and Marginal cost is at max
Marginal Revenue equals zero and Marginal Cost is declining as production increases
In analysis of a farm, what would you do if a cash flow projection indicated that there would be more expense than income in a certain month?
Terminate the enterprise causing the cash flow problem that month
Use savings, delay expenses, move up sales, or borrow money
Change from cash to accrual accounting method
Change depreciation methods
None of the above
Which of the following is restricted to family farm bankruptcies?
Chapter 7
Chapter 11
Chapter 12
Chapter 13
None of the above
Which of the following shows the marginal revenue associated with a change in the farm business?
Partial Budget
Cash Flow Budget
Whole Farm Budget
Enterprise Budget
None of the above
Purchasing a put option gives the buyer which of the following?
Sell a specific futures contract at an unknown price
Purchase a specific futures contract at an unknown price
Purchase a specific futures contract at a known price
Sell a specific futures contract at a known price
None of the above
The money on deposit with a broker to trade futures contracts is called:
Basis
Margin
Commission
Option
None of the above
Which of the following shows the projected costs and returns associated with one production process?
Partial Budget
Cash Flow Budget
Whole Farm Budget
Enterprise Budget
None of the above
The short-run supply curve for a firm is the same as the:
Average variable cost curve
Average fixed cost curve
Average total cost curve
Marginal cost curve
None of the above
The USDA agency that administers the federal crop insurance program is the:
Risk Insurance Agency
Farm Service Agency
Farm Crop Insurance Agency
Rural Development Agency
None of the above
The capital gains taxes that would be due should a farmer sell his land is an example of a:
Current liability
Long-term liability
Deductible expense
Contingent liability
None of the above
A line of credit is typically used for which of the following?
Operating loan
Machinery purchase loan
Farm land purchase loan
All of the above
None of the above
The demand curve shows the relationship between:
Consumer tastes and the quantity demanded
Price and the quantity demanded
Price and production costs
Money income and quantity demanded
None of the above
The sum of the average fixed cost and average variable cost at any rate of output is?
Average total cost
Total cost
Average minimum cost
Marginal cost
None of the above
Under a flexible cash lease in which the rent paid is set equal to 30% of the actual gross income from the crop, the owner and tenant share what type of risk?
Price
Production
Price and yield
Cost of production
None of the above
It is profitable for a farmer to borrow money to expand his farm business when the borrowed money:
Can improve the level of production
Can be secured at a low interest rate
Is used to purchase land
Returns more than the cost of borrowed money
None of the above
A farmer was late getting soybeans planted and an early Fall frost his the crop before the soybeans matured. Soybean harvesting costs are $38 per acre. Returns will be only $80 per acre when the soybeans are harvested. Prior to the frost, $106 per acre had already been spent for soybean production expenses. The farmer should:
Abandon the soybean crop because the farmer can't cover all variable expenses including harvesting
Proceed to harvest the soybeans
Rent the field to a neighbor for $38 per acre to use as a sheep grazing instead of harvesting the soybeans
Harvest half of the soybean acres and abandon the other half of the soybean crop to reduce losses
None of the above
The opportunity cost of an investment in new farm equipment is associated with:
The amount of income that new equipment will generate
The income lost by using the investment expense in its next most profitable activity
The lost opportunity to use the investment to purchase land
The increase in farm income generated by the new equipment minus the costs of operating it
None of the above
The advantage of financial leasing to acquire a new tractor rather than purchasing it is that:
A leased new tractor can be depreciated more rapidly than a new tractor that is purchased
Leasing the new tractor usually requires less money for down payment
A leased new tractor qualifies for investment tax credit while a purchased new tractor does not
Leasing a new tractor will be less expensive over the long run than purchasing
All of the above are advantages of financial leasing
The total amount borrowed (loan principal) for a farm loan can actually be increased without increasing the amount of the annual payments for the loan by:
Agreeing to pay the lender a higher loan interest rate for the money borrowed
Buying more acres of land as collateral security to reduce the loan's risk
Reducing the farm's current production costs to generate more profits
Increasing the number of years for the loan repayment period
Paying off the loan at a quicker repayment rate before reaching its loan maturity
How should you value farm grown feeds such as corn or hay in a livestock feeding enterprise budget?
The actual cash amount invested in growing crops for feed
Estimated purchase cost of similar commercial feeds for livestock
Actual production costs of the farm grown feeds
Current market selling price of the farm grown feeds
Opportunity cost for producing feed for livestock production
When an increase in the level of production of one enterprise causes a reduction in the level of production of another enterprise, the production relationship between these two farm enterprises would be:
Independent
Competitive
Supplementary
Complementary
Restrictive
Which one of the following items would not appear on a Balance Sheet dated December 31, 2012 for a farming operation?
A farm mortgage payment that was owed in 2012 and still remains unpaid
Farm real estate taxes assessed for 2012 that will be paid the following year 2013
Feeder pigs that were bought, fed out, and then sold during 2012
A new combine purchased by the farm business during 2012
Grain harvested during 2012 that is still being held in storage on the farm
When adding an enterprise to an existing farm organization, a farmer should choose the enterprise which:
Utilizes surplus capital
Produces the highest net returns to the available resources
Produces the largest increase in gross receipts
Lowers the total cost of production
Decreases the marginal cost of production
When analyzing a farm business operation, a Cash Flow Budget offers the following advantages except:
Determines when the farm business needs to borrow money during the year
Shows how the cash income of the farm business is being spent for what use during the year
When the farm business can increase its cash spending without additional borrowing
Shows when the machinery depreciation expense will be paid
All of the above are appropriate advantages for using a Cash Flow Budget
If summer sausage and a specialty cheese are complementary goods, a decrease in the price of summer sausage will cause:
Demand for specialty cheese to increase and the equilibrium price to decrease
Demand for specialty cheese to decrease and the equilibrium price to decrease
Demand for specialty cheese to decrease and the equilibrium price to increase
Demand for specialty cheese to increase and the equilibrium price to increase
None of the above
A market structure characterized by a small number of buyers is a(n):
Competitive market
Monopoly market
Oligopoly market
Monopsony market
Oligopsony market
Joe feels that the demand for sweet corn at the farmer's market is elastic. This means that an increase in the price of sweet corn will:
Decrease the quantity of sweet corn demanded a little
Increase the quantity of sweet corn demanded a little
Decrease the quantity of sweet corn demanded a lot
Increase the quantity of sweet corn demanded a lot
Not change the quantity of sweet corn demanded
The Petersons have historically forward contracted the price they receive for the crops they have grown. They would like to obtain the benefits if prices increase, but maintain the floor if prices fall. Which of the following alternatives should they consider?
Buy a call option
Sell a call option
Buy a put option
Sell a put option
Sell a call option and buy a put option
Which of the following is a type of business organization that achieves the favorable tax attributes of a partnership, the limited liability of a corporation, and a high degree of flexibility to fit business needs?
Sole proprictorship
Limited partnership
Subchapter S corporation
Limited liability corporation
Trust
The wide spread adoption and use of genetically modified wheat seed should?
Decrease price
Reduce quantity demanded
Increase price
Decrease supply
None of the above
To be "short" in the futures market means that:
Trader has purchased contracts not covered by sales
Trader has sold contracts not covered by purchases
Trader has sold cash grain
Trader has bought cash grain
None of the above
The are economies of size whenever a larger business:
Has a larger average cost per unit of output
Has a smaller average cost per unit of output
Has the same average cost per unit of output
Economies of size cannot be described in terms of average costs
Has larger fixed costs
If the U.S. wheat industry has an inelastic market demand curve, an actual reduction in the total market supply of wheat being produced and supplied to the market by wheat producers would result in:
Increase in total sales revenues to wheat producers in wheat industry
No effect on total sales revenue to wheat producers in wheat industry
Decrease in total sales revenues to wheat producers in wheat industry
Large increase in market demand for wheat by flour processing firms
None of the above
A government price support above the market equilibrium price will most likely:
Encourage consumption
Discourage production
Have no market impact
Create excess supply
None of the above
What shows how output changes in response to difference input levels?
Supply curve
Demand curve
Production function
Isoquant
Total cost curve
The supply curve shows the relationship between:
Consumer preferences and the quantity of production supplied
Price and the quantity demanded
Price and total production costs
Farm production and income
None of the above
An increase in the rate of inflation, everything else equal, will have what impact on the present value of a future stream of cash flows?
No impact
Increase present value
Decrease present value
Increase cash flows
None of the above
What could cause an increase in the inflation rate?
High levels of government spending
Decreasing unemployment
Increase in the cost of oil
An increase in the federal minimum wage
All of the above
A commonly recommended hedge against inflation is to:
Purchase farm land
Purchase bonds
Purchase stocks
Purchase a certificate of deposit (CD)
All of the above
Following monetary easing policies by the Bank of Japan, the Japanese Yen exchange rate weakened considerably against the U.S. dollar. Which of the following is an impact of the weakened Japanese Yen?
Cost to purchase U.S. exports decreases in Japan
Quantity of U.S. exports increases in Japan
Price of U.S. exports increases in U.S.
Cost to purchase U.S. exports increases in Japan
None of the above
President Barak Obama signed the "2014 Farm Bill" into law on February 7, 2014 with a projected budget of $956 Billion over 10 years, stating the new law "helps rural communities grow" and "gives farmers some certainty" while also helping "make sure America's children don't go hungry". What is the official title of the 2014 Farm Bill?
The Federal Agriculture Reform and Risk Management Act of 2014
The Agricultural Act of 2014
The Food Security Act of 2014
The Food Conservation and Energy Act of 2014
The Agricultural Adjustment Act of 2014
In the United States, the Farm Bill is the primary agricultural and food policy tool of the federal government. Which of the following Farm Bill titles receives the largest amount of the projected $956 Billion Farm Bill budget?
Commodities
Conservation
Trade
Crop Insurance
Nutrition
A major change in the 2014 Farm Bill affecting the farm safety net program was the elimination of the direct payment program that will be replaced by enhanced insurance based programs. Crop insurance substitutes:
An asset for a liability
A certain cost for an uncertain loss
An uncertain cost for a certain gain
Risk for non-risk
An uncertain loss for an uncertain gain
Livestock, stored grain, land, and personal property used to secure a loan are:
Liability
Inventory
Collateral
Net worth
None of the above
The main risk of an adjustable rate mortgage is that:
The initial interest rate is usually higher than for other types of loans
The interest is not deductible for farm businesses
It is only available for loans under $100,000
The interest rate can increase
None of the above
Corn and barley are substitutes for each other in many livestock feed rations. A decrease in the supply of corn would cause the demand for barley to:
Shift to the left
Shift to the right
Decrease
Remain unchanged
None of the above
If you purchase a put option, what is your future price expectation?
Prices will increase above the strike price
Prices will decrease below the strike price
Prices will be the same as the strike price
Prices will increase basis risk
Prices will decrease basis risk
To continue to produce in the short run, a farm producer must cover which production costs?
Variable Costs
Fixed Costs
Total Production Costs
Overhead Costs
Opportunity Costs
The USDA agency that administers the federal crop insurance program is the:
Risk Insurance Agency
Farm Service Agency
Farm Crop Insurance Agency
Risk Management Agency
None of the above
To be "long" in the futures market means that:
Trader has purchased contracts expecting prices to decrease
Trader has purchased contracts expecting prices to increase
Trader has sold contracts expecting prices to decrease
Trader has sold contracts expecting prices to increase
None of the above
All of the following are advantages of a Cash Rent Lease to the tenant except:
Chance to gain additional profits during times of high prices and/or good yields
Opportunity to manage the farm without landlord supervision (i.e. most freedom)
Still free to own and operate tenant's own livestock program
Gain full benefit of yield increasing technology or management practice
Less cash reserve required than by a Crop-Share lease
All of the following are advantages of a Crop Share Lease to the tenant except:
The landlord now shares in all price risks
The landlord is now more willing to make needed farm improvements
The landlord must share in all crop production risks
The landlord makes the management decisions for the farm
The landlord is required to pay a larger share of the farm's cash expenses
A farmer placed too low a value on his feeder pigs in his closing inventory while all other records were accurate. The farm's current ratio is:
Too low
Too high
Not affected
Fixed
None of the above
A cash-crop farmer is able to cash rent a neighboring 100 acres of cropland for $120 an acre to farm with his own 400 acres. He does not plan to purchase any additional equipment to handle the additional acreage. The effect on his costs will be mainly:
To increase unit fixed costs
To decrease unit fixed costs (B)
To increase unit variable costs
To decrease unit variable costs (D)
Both B and D
In a livestock enterprise budget prepared on July 1st, home-grown feed:
Should not be included as a cost
Should be included valued at its cost of production
Should be included, valued at its net market price
Should be valued at past year's inventory value
None of the above
A trader with a long position in the futures market:
Profits when prices go down; loses when prices go up
Profits when prices go neither up nor down
Profits when prices go up; loses when prices go down
Cannot lose money
None of the above
The 2014 Farm Bill - Dairy Margin Protection Program introduced a margin insurance program for dairy producers to manage risk. The margin insurance program substitutes:
An asset for liability
A certain cost for an uncertain loss
An uncertain cost for a certain gain
Milk price market risk for feed cost production risk
An uncertain loss for an uncertain gain
The accounting process for prorating the cost of a capital asset over its useful life is?
Amortization
Matching
Depreciation
Compounding
None of the above
Supplies are purchased and paid for during an accounting period. At the end of the accounting period, the value of the supply inventory is larger than at the beginning of the accounting period. This indicates which of the following?
Cash receipts are an accurate measure of supply expenses for the accounting period
Cash expenses are an accurate measure of supply expenses for the accounting period
Cash expenses are understate actual supply expenses for the accounting period
Cash expenses are overstate actual supply expenses for the accounting period
None of the above
Developing an accrual adjusted income statement requires:
Inventory records, cash revenue, cash expenses, depreciation records
Depreciation records, cash revenue, cash expenses
Inventory records, cash revenue, depreciation records
Inventory records, tax records, production records
None of the above
The supply curve shows the relationship between:
Consumer preferences and the quantity of production supplied
Price and the quantity supplied
Price and the total production costs
Farm production and income
None of the above
Successive increases in irrigation water used per acre of alfalfa results in smaller and smaller increases in alfalfa yield. This illustrates:
Profit maximization
The Law of Supply and Demand
Opportunity cost
The Law of Diminishing Marginal Returns
None of the above
Green Acre Farms has more current assets than current liabilities. The Farm's current ratio is:
Negative
Zero
Between 0 and 1
Greater than 1
None of the above
Producing several enterprises is using what type of risk management?
Leverage
Diversification
Hedging
Insurance
None of the above
Selling a commodity futures contract to protect against price fluctuations is using what type of risk management?
Leverage
Diversification
Hedging
Insurance
None of the above
The own price elasticity of supply estimates the impact on the quantity of a good supplied by a change in the price of the good. Normally the own-price elasticity of supply is?
Positive
Negative
Zero
Indeterminate
None of the above
The income price elasticity of demand estimates the impact of a change in income on the demand for a good. For normal goods the income elasticity of demand is?
Positive
Negative
Zero
Indeterminate
None of the above
The procedure for expressing future cash flows in today's dollars is called?
Compounding
Deflating
Inflating
Discounting
None of the above
The Balance Sheet shows the financial condition of a business:
For the accounting period
For a calendar year
At a particular point in time
At a period of time determined by the creator of the financial statement
None of the above
The Balance Sheet contains the following items:
Assets and liabilities
Assets and expenses
Assets and depreciation
Revenue and expenses
Revenue and cash flow
The financial statement that measures the profit of a business is the:
Balance sheet
Schedule F
Cash flow budget
Statement of owner equity
Income statement
When a producer has purchased a futures market contract and the market moves against the hedging position taken in the contract, the producer will get?
A margin call
To sell at a profit
Will strengthen the basis
Will weaken the basis
None of the above
Purchasing a call option provides which of the following?
Sell a specific futures contract at an unknown price
Sell a specific futures contract at a known price
Purchase a specific futures contract at a known price
Purchase a specific futures contract at an unknown price
None of the above
If you purchase a call option, what is your future price expectation?
Prices will increase above the strike price
Prices will decrease below the strike price
Prices will be the same as the strike price
Prices will increase basis risk
Prices will decrease basis risk
Which of the following business ventures would purchase a call option?
A feedlot manager selling a lot of finished cattle
A corn producer selling a bin of feed corn
A ketchup maker purchasing tomatoes
A packer (slaughter plant) purchasing finished cattle
None of the above
A person who thinks that market price is heading higher is considered to be:
Bearish
Bullish
Short
Capitalistic
None of the above
The difference between the future market and the local cash market is called the?
Margin
Strike price
Hedge
Derivative
Basis
How many acres are in a section of land?
160
320
640
1280
2560
What is the Law of Supply?
The higher the quantity demanded the higher the price
As price decreases the quantity supplied increases
The higher the price the higher quantity supplied will be
The higher the risk of production the higher quantity demanded will be
The more inelastic the supply the more inelastic the price will be
Suppose the supply curve shifts to the left. What is the most likely effect on price and quantity demanded?
Price will increase and the quantity demanded will decrease
Price will increase and the quantity demanded will increase
Price will decrease and the quantity demanded will decrease
Price will decrease and the quantity demanded will increase
None of the above
What economic law dictates the shape of the Total Production Function?
The law of production
The law of supply
The law of demand
The law of diminishing returns
None of the above
On Friday, May 15, 2015 Governor Jay Inslee declared a statewide drought emergency for Washington citing low snowpack, falling river levels and rising temperatures. Drought represents what type of risk?
Production risk
Market risk
Legal risk
Financial risk
All of the above
The production impact of a drought will have what impact as listed below?
Movement down the demand curve
Shifts the supply curve to the left
Shifts the supply curve to the right
Movement up the supply curve
Movement down the supply curve
What demand impact will a drought typically have?
Shifts demand curve to the right
Shifts demand curve to left
Movement up demand curve
Movement down demand curve
None of the above
The demand curve shows the relationship between:
Consumer preferences and the quantity of production supplied
Price and the quantity supplied
Price and total production costs
Farm production and income
None of the above
The point at which a demand curve and supply curve intersect is called:
Point of diminishing marginal returns
Inflection point
Equilibrium point
Point of indifference
None of the above
The economic relationship between the quantity of an output and the quantity of inputs for a firm is called what?
Production possibility curve
Production function
Supply curve
Marginal production curve
None of the above
What is the name of the business structure where farmers pool resources for improved business efficiencies?
Co-operative
Limited liability partnership
Subchapter S corporation
Limited liability corporation
None of the above
What is the financial statement that reports assets, liabilities, owner equity and their relationship to each other at a particular time?
Income statement
Statement of owner equity
Statement of cash flows
Profit and loss report
None of the above
Washington dairy farmers export a higher proportion of their milk. The exchange rate of the U.S. dollar strengthened over 2015. Which of the following is a likely impact to the dairy farms from a strengthening dollar?
Cost to purchase WA milk decreases in foreign markets
Price of WA milk decreases
Quantity of WA milk exported increases
Amount of WA cheese produced will decrease
All of the above
Prorating the cost of a capital asset over its useful life is called:
Capital budgeting
Amortization
Depreciation
Devaluation
None of the above
What is a "Section 179 Deduction"?
A deduction in commodity sale revenue for not meeting quality requirements
A 2014 Farm Bill program to help beginning farmers deduct the cost of starting a new farm from their taxes
The farmers share of health care costs under the Affordable Care Act
Allows a farmer to expense a capital purchase up to a maximum limit
None of the above
For 2015 what was the maximum Section 179 deduction allowed?
$125,000
$300,000
$500,000
$750,000
None of the above
If a diversified farming operation raises and sells hay, among other commodities, a detailed listing of revenues and expenses for just the part of the farming operation dealing with the hay would be called what?
Partial budget
Cash flow budget
Whole farm budget
Enterprise budget
None of the above
Money owed to the farm business but not yet collected is called:
Accounts payable
Accounts receivable
Accrued expenses
Annuities
None of the above
In April 2016, a local grain co-op quotes a farmer purchase offer of $0.25 under December 2016 futures for a future sale and will pick up the grain for free. Which of the following best represents the $0.25 number?
The expected December wheat basis
The storage cost per bushel
The cost of hauling wheat to the terminal
The grain co-ops commission fee per bushel
None of the above
Which of the following has happened for a farm business whose current assets have decreased more than current liabilities?
Solvency has increased
Liquidity has increased
Equity has increased
Operating efficiency has increased
None of the above
Net worth on a balance sheet equals total assets minus:
Equity
Debt
Accrued expenses
Total liabilities
None of the above
Which is not a source of owner equity for a farm Business?
Loans received to purchase land
Increases in the value of owned land
Retained earnings
Assets contributed to the farm by the owner
None of the above
The statement that reports a farm's taxable net income, is the:
Balance sheet
Schedule F
Cash flow budget
Statement of owner equity
Income statement
The price at which a producer buys or sells an option is the?
Margin price
Futures price
Basis price
Strike price
None of the above
What do you call an investor that purchases/sells futures contracts but does not have any commodities to sell or wants to take delivery of commodities purchased?
Broker
Speculator
Regulator
Banker
None of the above
On January 18, 2017 the Washington Department of Ecology released new environmental regulations affecting Concentrated Animal Feeding Operation (CAFO) State Waste General Permits. The new regulations are classified as what type of risk?
Production risk
Market risk
Legal risk
Financial risk
All of the above
The new CAFO Washington State Waste Discharge General Permit requires increased soil testing, requires wider grass buffer strips and increased engineering requirements for waste water lagoons that will require many dairies to reconstruct their lagoon. These changes will have which of the following affect?
Shifts demand curve to right
Shifts total revenue curve lower
Shifts supply curve to right
Shifts average fixed cost curve up
Shifts average variable cost curve down
The new CAFO Washington State Waste Discharge General Permit will have which of the following affect on dairies?
Economies of size benefits large dairies over small dairies in meeting the new regulation
Dairies will decrease herd size to better match manure production to meet the new regulations
Milk production will increase in an attempt to increase revenue to cover increased costs
Some dairies will stop production because they cannot economically meet the new regulation requirements
Indeterminate - any, all or none of the above could occur
A farm business operation that is insolvent is best described as a situation where:
Total liabilities are low relative to the farm's current net worth
Current liabilities are greater than the farm's current gross cash earnings
Net farm income accounts for a high percentage of the farm's current total assets
Total liabilities exceed total assets for the farm business
Current assets are less than the farm's existing current liabilities
Financial progress for a farm business operation from one year to the next year is best measured by the:
Change in farm's Total Assets during past year
Change in farm's Net Worth during past year
Change in farm's Total Liabilities (debt) during past year
Change in farm's taxable farm income during past year
Change in farm's cash available (cash reserve) during past year
The current ratio for a farming operation is a measure of:
Managerial ability
Credit reserve
Financial liquidity
Equity solvency
None of the above
What is the name of the business structure where a solely owned farm cannot be held personally liable for the farm's debts?
Co-operative
Limited liability partnership
Subchapter S corporation
Limited liability corporation
None of the above
Washington wheat farmers export a majority of their production. The exchange rate of the U.S. dollar strengthened over 2016 and remains strong in 2017. Which of the following is a likely impact to wheat farms from a strengthening dollar?
Cost to purchase WA whet decreases in foreign markets
WA wheat acreage planted increases
Quality of WA wheat exported decreases
WA wheat price decreases
None of the above
A Whitman County dryland farmer has a winter wheat, spring wheat, and legume rotation. Which type of budget is needed to evaluate the net return from the spring wheat crop in the rotation?
Partial budget
Cash flow budget
Whole farm budget
Capital budget
None of the above
Financial solvency for a farming operation has been achieved when the farm owner has:
Sufficient Current Assets in the farm business to cover the payment of all current debts
Net Income earned from the farm business will exceed the payment of farming expenses
Total Assets in the farm business will exceed the payment of farming expenses
A positive Cash Flow balance is generated by the farm business operation during the year
Equity in the farm business will cover all loan payments coming due within the next year
One of the benefits of planning a cover crop is an increased yield of the crop following the cover crop. The production relationship between these two crops is called:
Independent
Competitive
Complementary
Supplementary
Restrictive
On an agricultural producer's balance sheet, which of the following contains only current liabilities?
Principal due within a year on five year loans, cleaned home grown wheat seed
Accrued interest, calves that died within the last year
A broken water pump, amount owed implement dealer for machinery parts
Amount owed co-op elevator for feed, principal due within a year on term loans
All of the above
Which of the following has happened for a farm business whose current assets have increased more than current liabilities?
Solvency has increased
Liquidity has increased
Equity has increased
Operating efficiency has increased
None of the above
Working capital is:
Assets minus current liabilities
Assets minus liabilities
Assets minus equity
Current assets plus current liabilities
Current assets minus current liabilities
When farm commodity prices decline, a common farm management recommendation is for the farmer or the farmer's spouse to obtain off-farm income by getting a job in town. If off-farm income is used to pay farm production expenses or pay farm liabilities how is that accounted for in the farm's balance sheet?
Increase in cash and increase in current liabilities
Increase in current liabilities and decrease in cash
Increase in contributed capital and increase in current liabilities
Increases in accounts receivable and an increase in cash
Increase in cash and an increase in contributed capital
