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WorksheetsAGRICULTURE TEST
Total questions: 47
Worksheet time: 24mins
The purpose of the beginning balance sheet for a company is to show
if the business made a profit in the previous year
the value of assets liabilities, and owner equality
the change in owner equity for a given period
the change in cash balance
cash on hand on a business 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 assest
the cash balance in the farm hedging account
the cash balance in the farm checking account and the personal checking account
The debt to assets ratio is measure of the solvency of a farm business. Which of the following indicates the business is not solvent
15.1%
.35%
90%
106%
homer purchased 240 acres of timber land. he obtained a load for $142,229 at 4.75% interest with the local lender. What would be the amount of interest he would be required to pay for 9 months
$5066.91
$6,755.88
$562.99
$105,210.49
which of the following would be considered a current asset
market livestock
breeding livestock
equipment
land
which of the following would be considered a non-current liability
accounts payable
accrued interest
operating loan balance
land mortgage
a whole farm schedule of expected income and expense is a
balance sheet
partial budget
budget
depreciation schedule
there are_____ stages of production
one
two
three
no set number. it depends on the product being produced
am enterprise budget is
a physical and financial plan for the entire farm business for a specified period of time
a statement of projected cost and returns associated with one production process one production cycle
a record of past production performance, usually for one production cycle
the tools used in analyzing only changes in the farm operation and the potential change in net income
budgeting is not used to
determine the useful its if assets
estimate the amount of credit needed
allow for experimentation with possible outcomes before resources are commited
help with organizing
The cost of using a resource based on what it could have earned in the next best alternative is
always a variable cost
always a fixed cost
an alternative cost
an opportunity cost
which of of the following would be considered a fixed cost
hired seasonal labor
depreciation on machinery
crop production inputs
feed purchases
which of the following statements is not a true statement about cash flow projections
they can based on an annual or monthly projections
they provide information that helps guide decisions in the upcoming year
they are more important to a lender to load purposes than to the farmer for planning
they include both known and unknown amounts of income and expense
country a's currency has weakened relative to country B's currency. As a result, agriculture goods produced in country A are now ______ in retail markets in country B
More expensive
less expensive
the same price as before
not allowed
How many acres are in a plot that measures 1320 feet by 1630 feet.
3,484,800
3,960
80
76.8
a rising cash price relative to the futures price is known as
strengthening basis
weakening basis
under basis
basis risk
a producer using the futures market to hedge the price of a commodity sold in the fall would take what action in may
sell futures contracts expecting to buy them selves back when the commodity is sold
sell futures contracts expecting to sell more contracts when the commodity is sold
sell futures contracts expecting to buy more contracts when the commodity is sold
sell futures contracts expecting to sell those contracts when the commodity is sold
the main thing to keep in mind about income tax management is to
minimize your tax obligation
have zero taxes due
maximize your after tax income
defer your income taxes to the future
effective tax planning
has nothing to do with personal financial goals
is most effective with up to date records
does not require long - range projections
usualy aligns with mid-year tax estimates
the taxes that may be due when a person dies
production loss taxes
estate taxes
property taxes
real estate taxes
when a farmer trades in a piece of equipment, it is:
considered tax-free income
left on the depreciation schedule
added to the total list price of a new item
treated as a sale
assume that a cotton picker has an annual fixed cost of $21,213 and variable costs of $53.42 per acre. A custom picker charges $71.50 per acre. what is the break-even point in acres per year
428 acres
866 acres
1173 acres
1425 acres
for an amortized loan, which of the following increases each year
total payment
interest payment
principal payment
interest rate
an asset that will normally be owned or used up over a period longer than a year is called
noncurrent asset
current asset
intermediate asset
liquid asset
when you incorporate a farm business, the assets of the business are transferred to the corporation in exchange for
cash
deferred payment
accrual certificates
stock certificates
_____ describes an accounting year that begins on any day other than January first. For farms it is generally recommended that this period follow the production cycle of the major enterprise and end when the business activist are slow
calendar year
enterprise year
fiscal year
business year
the amount of money received from selling a product or service is called
income
cash
debt
finance
what is the principal payment for year 4
$4,220
$3,588
$3,708
$3,829
which of the following will change if the price of the skid steer increases?
interest rate
term length of the loan
payment amount
none of the above
If all else was kept the same, what would happen if the length of the loan was extended by three years
The amount of money borrowed would have to change
the annual payment would be higher
the annual payment would stay the same
the annual payment would be lower
A farmer has a debt of $1948.00 that must be paid next month. His debt would be listed as a:
capital asset
debt equity ratio
current asset
current liability
which of the following is NOT a variable cost?
machinery
seed
diesel fuel
fertilizer
The_____ Is a summary of revenue and expenses for a given accounting period
income statement
checking account statement
net worth statement
budget
depreciable farm property must have a useful life of
at least one year
more than one year
more than 5 years
more than 10 years
changes in the price of corn or any other commodity that a farmer produces is considered x
market risk
production risk
legal risk
human risk
the rpice at which consumers are willing to buy all that the producers are willing to supply to the market is called the
opportunity price
equilibrium price
support price
basis price
A_____ is a systematic organization of everything owned (asset) and owed (liability) by a business or an individual at the given time
budget
balance sheet
amortization schedule
tax value basis
assets used in farming. Other than land and some livestock, that have a useful life of more than one year are
ordinary expenses
not tax deductible
current inventory
depreciable
at what stage of production does the total product decrease if the input increases
one
two
three
harvest
____ gives you protection against financial loss if property is damaged, destroyed or stolen
life insurance
crop insurance
property insurance
liability insurance
When developing a crop enterprise budget for an acreage that will be double cropped (two crops on the same land in the same year) the budget should:
combine both crops and split and expenses evenly per acre
developed for the acreage and combine the total cost
developed for each crop and the annual cost for land be divided between and two crops
consider the acreage to contain a single crop and calculate the budget accordingly
calculate their net cash farm income
$145,368
$55,605
$43,123
$27,464
calculate their net operating profit
$145,358
%55,605
$42,123
$27,464
calculate the net farm income
$145,368
$55,605
$43,123
$27,464
which of the following is a source of farm revanue
principal payments during the accounting period
interest payments during the accounting period
sale of cabbage produced during the accounting period
cash received from a new noncurrent loan to purchase a new tractor
when using cash accounting records, a business will recognize
income and expense transactions at the time of actual cash transactions
income and expense transactions regardless of when they are incurred
income when it is produced
expenses when the item is used in the production process
If you are considering a change in the farm business that affects only a few items in the total farm budget, this change could most appropriately be evaluated using
a partial budget
an enterprise budget
a cash flow budget
a total farm budget
