WorksheetsFinancial Statements Quiz (B)
Total questions: 83
Worksheet time: 1hrs 17mins
This financial statement lists cash receipts and expenses of a farm during a specified time period.
Balance sheet
Income statement
Statement of owner equity
Statement of cash flow
Which of the following lists the four basic financial statements?
This financial statement lists assets, liabilities, and owner equity at a particular time.
Balance sheet
Income statement
Statement of owner equity
Statement of cash flow
This financial statement makes adjustments to cash receipts and expenses of a farm during a specified time period to arrive at net farm income from operations.
Balance sheet
Income statement
Statement of owner equity
Statement of cash flow
Which of the following is NOT one of the basic financial statements?
Balance sheet
Income statement
Monthly bank statement
Statement of owner equity
A balance sheet will list which of the following items?
Assets and liabilities
Receipts and expenses
Expenses and assets
Liabilities and expenses
Inventory changes and changes in the value of prepaid expenses would be used to calculate which of the following?
Net cash income from operations
Accrual adjusted net farm income from operations
Gross cash income
Depreciation
Current farm assets are typically valued at ________.
cost
Market value
Depreciated value
Cost less depreciation
The Net Worth Statement of 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 defined by the creator
While financial records are critical to the management of a business, in order to have a complete understanding of the business, managers also need ________.
Physical records
Inventory records
Machinery records
Input records
Which of the following is NOT one of the basic financial statements?
Balance sheet
Income statement
Monthly bank statement
Statement of owner equity
A balance sheet contains the following items:
The financial statement that measures the profit of a business is the ________.
Statement of cash flow
Income statement
Balance sheet
Statement of owner equity
Expenses that would be accounted for on an income statement include all of the following except ________.
Fertilizer
Fruit purchases
Principal payments
Part-time hired labor
An enterprise budget __________.
is the tool in analyzing only changes in the business operations
is a physical and financial plan for the entire farm business for a specified period of time
shows the expected returns and costs associated with a specific production activity
is a record of past performance
The formula used to calculate break-even prices to cover total operating costs is __________.
Total operating costs plus (price times yield) = 0
(price times yield) minus total operating costs = 0
(price times yield) minus total cost = 0
total cost minus (price times yield) = 0
A tool used to analyze change in the business operation is __________.
An income statement
A profit and loss statement
A partial budget
ALL of the above
For capital assets the difference between the purchase price and the sales price is taxed as __________.
Capital deductions
Capital returns
Capital gains
Expansion of net worth
The original purchase price for land is considered its __________.
Acquisition
Basis
Depreciation value
Net income value
The net worth statement or balance sheet reveals __________.
Owner equity by subtracting total liabilities from total assets
Net farm income by subtracting total expenses from total revenues
Cash income by subtracting total cash expenses from total cash receipts
The increase in retained earnings by subtracting total liabilities from total assets
Developing an accrual adjusted income statement requires __________.
Inventory records, cash revenues and cash expenses
Depreciation records, cash revenues and depreciation records
Inventory records, cash revenue and depreciation records
Inventory records, cash expenses and depreciation records
Which of the following is NOT one of the basic financial statements?
Monthly bank statements
Income statement
Statement of cash flow
Statement of owner equity
What type of liability is “interest on short term loans”?
Deferred liability
A prepaid liability
Accrued liability
Ending liability
Principal is __________.
Rate of return on assets is __________.
Return on investment is __________.
The cost value of intermediate and long-term assets is equal to __________.
The net worth statement or balance sheet reveals ________.
Net worth 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 earning by subtracting total liabilities from total assets
Another term for net worth is (a) .
Which of the following is NOT one of the basic financial statements?
Balance sheet
Monthly bank statement
Income statement
Statement of cash flow
Which of the following financial statements helps managers understand the sources and uses of cash?
Income statement
Statement of cash flows
Statement of owner equity
Balance sheet
Partial budgets are useful in evaluating changes such as ________.
An enterprise budget is ________.
The term Debt Coverage Ratio measures _______.
Which of the following is an example of a noncurrent liability?
Farm machinery
Loan on feeder livestock
Loan on farm machinery
Prepaid expense
Which of the following is an example of a current asset?
Another term which has the same meaning as owner's equity is (a) .
Of the following, which is the most liquid asset?
Farm machinery
Balance in checking account
Breeding livestock
Feeder livestock
If a business has working capital greater than $0, its current ratio will be _______.
If the debt/asset ratio is increasing, then the debt/equity ratio will be _______.
Which of the following best describes a balance sheet?
It shows changes in assets and liabilities over the last accounting period.
It shows changes in assets and liabilities over a period of time.
It shows assets and liabilities at a point in time.
It shows profit for the last accounting period.
The best description of a business which has increased its debt/asset ratio is one which has ________.
Purchased more assets
Sold some assets
Increased its debt
Increased its debt relative to total assets
Which of the following assets would have the same value using either a cost or a market based valuation?
Land
Machinery
Prepaid expenses
Purchased breeding livestock
The degree to which a farm’s assets adequately cover or exceed its liabilities is referred to as ________.
Solvency
Profitability
Liquidity
Working capital
A statement of owner equity shows ________.
A list of all assets and liabilities
The valuation adjustment for owner equity
Owner equity for the past 20 years
The sources and amounts of changes in owner equity
Which financial statement covers only a single point in time rather than a period of time?
Income statement
Statement of owner equity
Statement of cash flows
Balance sheet
A lender would usually prefer to have farm assets valued at their ________ value on a balance sheet that is part of a loan application.
Cash
Accrual
Another name for a balance sheet is _______.
Net worth statement
Income statement
Statement of owner equity
Statement of cash flows
The “cost” value shown on a balance sheet for an asset such as a tractor is equal to _______.
The original purchase price
The original purchase price less depreciation expense taken to date
The original purchase price plus cost of all repairs to date
The cost of a new tractor of the same size
A “contingent” or “deferred” income tax liability is one that _______.
Is owed but not yet paid
Would be owed if and when an asset is sold
Represents delinquent taxes from past years
Would be due under cash accounting but not accrual accounting
The “cost” value of farmland can change due to _______.
Changes in the selling price of farmland
Accumulated depreciation
The cost of nondepreciable improvements made, such as terraces and earthen dams
Increases in property taxes
Paying a seed dealer a sum of money in December to be applied toward seed to be delivered in the spring would show up on a balance sheet as _______.
A prepaid expense
An account receivable
An account payable
Supplies on inventory
Which of the following items on a balance sheet would NOT be considered when making accrual adjustments to net income?
Accrued interest
Change in market value of land
Inventories of market livestock
Pre-paid expenses
Which of the following is NOT included as an expense on the net farm income statement?
Depreciation
Interest payments made on loans
Principal payments made on loans
The cost of supplies used but not yet paid for
Which type of financial statements would be most useful for keeping record of expenses?
Net worth statement
Net income statement
Statement of owner equity
Statement of cash flows
The current ratio is a measure of a farm firm’s ________.
Return on equity
Ability to pay short-term credit obligations
Return on investment in current assets
Level of total debt to total assets at a present time
The degree to which a farm’s assets adequately secure its debts is referred to as ________.
Liquidity
Solvency
Efficiency
Profitability
An advantage of using the value of working capital instead of a cash flow budget is to analyze a farm’s liquidity would be that ________.
It is simpler to calculate
It takes into account the timing of the cash flows
It takes into account revenue to be received from the sale of products not yet in existence
It takes into account future operating expenses as well as debt repayment
When the value of livestock production per $100 feed fed is greater than 100 it means that ________.
The livestock enterprise had a positive profit
The livestock enterprise had a negative profit
Feed costs were less than gross revenue adjusted for inventory changes, home consumption and livestock purchases
$100 per hundredweight was the breakeven sale price
Which of the following does NOT analyze the solvency of the farm business?
Debt/asset ratio
Turnover ratio
Debt/equity ratio
Equity/asset ratio
Which of the following is a measure of economic efficiency?
Net farm income
Gross revenue per year of labor
Change in owner equity
Net cash flow
Which of the following farm business analysis measures is NOT a measure of efficiency (either physical or economic)?
Gross revenue generated per person (FTE)
Pounds of milk produced per cow per year
Value of crops produced per acre
Dollars received per ton of hay sold
A farm’s asset turnover ratio measures ________.
A ranch that just replaced a large number of fences and corrals would most likely see which of the following ratios increase?
Depreciation expense ratio
Interest expense ratio
Operating expense ratio
Net farm income from operations ratio
Which of the following would NOT appear on a cash flow budget?
Feed purchases
Inventory change
Family living expenses
Cost of new tractor
Which of the following would appear on an income statement but NOT on a cash flow budget?
Gain or loss on sale of capital asset
Inventory changes
Depreciation
ALL of the above
When preparing a cash flow budget it is important to ________.
Take into account the expected timing of cash inflows and outflows
Include all noncash expenses
Include only noncash revenues
A cash flow budget can be used to ________.
Estimate when and how much money will need to be borrowed during the year
Estimate when and how much debt can be repaid during the year
Estimate when excess cash may be available so plans can be made to invest it
ALL of the above
A projected negative annual cash flow indicates ________.
Net farm income will be negative
Depreciation expense is too high
Projected cash inflows are less than projected cash outflows
Projected asset values are less than projected liability values
A cash flow budget can be used to monitor the farm business by ________.
Comparing actual cash inflows and outflows to the budgeted monthly cash flows
Comparing actual cash inflows and outflows to 10-year averages
Comparing the projected ending cash balances to the actual balances for each month
Comparing actual selling prices to those assumed in the cash flow budget
A cash flow analysis of an investment in a new capital asset should include projections for ________.
Several months
One year on a monthly basis
One year for a whole year only
Several years
The last step in constructing a cash flow budget should be ________.
Estimating the amount of crop and livestock production for the year
Estimating how much new current debt will be needed and can be repaid each month
Estimating family living expenses
Estimating when payments on existing debt are due
A cash flow budget should contain all of the following items except ________.
Which of the following is a noncurrent asset?
Feedlot cattle
Feed bill at a local feed store
Feed inventory
A 36-month certificate of deposit
An organized list of the value of all assets and all liabilities used by an accounting system is called ________.
A chart of account
A balance sheet
An income statement
A debit
Which financial statement assesses a specific point in time rather than a period of time?
Income statement
Statement of owner equity
Statement of cash flows
Balance sheet
Which of the following items on a balance sheet would NOT be considered when making accrual adjustment to net income?
Depreciation
Principal payments on machinery loans
Cost of new farm machinery to be purchased
Diesel fuel
A projected negative cash balance at the end of the year can be made positive by ________.
Delaying proposed purchases of capital assets
Carrying over less inventory of stored grain to the following year
Lengthening repayment periods on term loans
ALL of the above
The size of the minimum cash balance a farm business should try to show at the end of each budgeting period will depend on ________.
The total dollars of cash inflows and outflows projected
The form of farm business organization the farm chooses
The number of acres of farmland
The number of people employed on the farm
Which of the following is NOT included as an expense on the net farm income statement?
Depreciation
Interest payments made on loans
Principal payments made on loans
The cost of supplies used but not yet paid for
Which type of financial statements would be most useful for keeping records of expenses?
Net worth statement
Net income statement
Statement of owner equity
Statement of cash flows
Which of the following is a measure of economic efficiency?
Net farm income
Change in owner equity
Gross revenue per year of labor
Net cash flow
A ranch that just replaced a large number of fences and corrals would most likely see which of the following ratios increase?
Depreciation expense ratio
Interest expense ratio
Operating expense ratio
Net farm income from operations ratio
