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FFA Farm and Ranch Business Management Exam Flashcards | StudBud
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FFA Farm and Ranch Business Management Exam
FFA Farm and Ranch Business Management Exam
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Whitcomb FFA Farm and Ranch Business Management Exam
Flashcards
116 cards
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Practice quiz
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Questions
116
Answers
1
You borrowed $8,000 to plant corn you repaid $8,000 with $495 interest what was interest
I DONT KNOW
10.607%
6.187%
9.991%
2
A lease between a landlord and a tenant is equitable if it...
Is written by an attorney
Divides the income between the two according to contribution
Divides returns equally between the landlord and the tenant
I DONT KNOW
3
Buying more land without increasing total units of production the cost per unit of production
Decreases
I DONT KNOW
Increases
Remains the same
4
You work on your FFA stuff afterschool and do enough labor for $9.75 but dont get paid, what is
Opportunity Cost
I DONT KNOW
Living Wage
Minimum Wage
5
Insurance that pays 4 insured losses from damage/destruction of farm equipment/personal items
Is called Crop Insurance
Property Insurance
Is called Liability Insurance
I DONT KNOW
6
Accounts payable are
An expense that has incurred but not yet paid
I DONT KNOW
Considered operating loans
An expense a producer is not able to pay
7
U want to hedge grain in storage 2 protect against price decline when the grain is purchased u
Sell the grain and sell futures short
Sell futures contracts & buy the contracts back when sold
I DONT KNOW
Sell the grain
8
The failure to comply with the terms and agreement of a contract is called a
Commodity Contract
Fulfilled Contract
Breach of Contract
I DONT KNOW
9
Any farm asset that provides productive service more than a year and has finite life should be
Depreciated
I DONT KNOW
Sold
Appreciated
10
An advantage of making an estate the beneficiary of a life insurance policy is to
I DONT KNOW
Reduce estate tax liability
Provide cash to satisfy any tax liability
Decrease the size of the estate
11
A person named in an insurance policy to receive the proceeds of a policy is call the
Casualty
Debtor
Beneficiary
I DONT KNOW
12
You sell gilts for .85 per lb the load weight 46,550 pb hot carcass was 72% What $ before fees
I DONT KNOW
$39,430.59
$33,516
$28,488.60
13
The record summaries that may be used in farm and ranch business are
Income Statements
Net Worth Statements
I DONT KNOW
All the Above
14
Your cows got on the road they caused an accident with injuries you better hope you have good
Health Insurance
Workers Compensation Insurance
I DONT KNOW
Liability Insurance
15
The gain/profit made by selling an asset at a price higher than the original purchase price is
Called Capital Gains
Called Valuation
I DONT KNOW
Called Discounting
16
Prepaid expenses are items used in production that are on hand at the end of the year
but will be used during the next year
have value but are for resale
and are of no value to the producer
I DONT KNOW
17
In a market oriented exchange system such as that in the U.S. what is the catalyst for change
Supply
I DONT KNOW
Demand
Price
18
Variable cost $94.25 per acre fixed cost $12.47 per acre crop yield 50 bushels what breakeven
I DONT KNOW
$2.13 per bushel
$1.63 per bushel
$2.14 per bushel
19
The pecan factory realized that 4 every 10 bags sold the $ 2 make more decreased by .15 this is
Economic Efficiency
I DONT KNOW
Enterprise Analysis
Economics of Size
20
Easier to use but may have highly distorted view of over/under estimating profit in some years
Accrual Method
I DONT KNOW
Cash Method
21
An itemized list of goods on hand with their estimated worth is called a
Gross Return
Investment
I DONT KNOW
Inventory
22
The cost of using a resource based on what it could have earned int eh next best alternative is
I DONT KNOW
Always a variable cost
An opportunity cost
Always a fixed cost
23
The cost of borrowing money that allows for adjustment fo the interest rate periodically is
Annual Percentage Rate
Variable Interest Rate
Interest Rate of Return
I DONT KNOW
24
This method of accounting records all transactions when payment is made or received
Cash Method
Accrual Method
I DONT KNOW
25
Accrual accounting...
Records income when received and expenditures when paid
Records income when earned and expenses when incurred
I DONT KNOW
Does not require maintaining an inventory of assets
26
Which type of insurance protects your business from lawsuits if personal injury etc occur
I DONT KNOW
Life Insurance
Helath Insurance
Liability Insurance
27
The cost of producing on additional unit of output is called...
Marginal Cost
Substitution Cost
I DONT KNOW
Average Cost
28
The ability of a business to generate enough cash to pay bills without disrupting business is
Transparency
Capacity
I DONT KNOW
Liquidity
29
A corporation formed by a group of people to provide specific products or services 2 themselves
Is Cooperative
Is Trust
IS Limited Liability Company
I DONT KNOW
30
A peanut producer would consider which of the following to be a variable cost
Repairs on equipment barn
Seed Cost
I DONT KNOW
Property Taxes
31
The demand for a product is said to be perfectly inelastic if...
Decrease price is accompanied by increase in quality demand
I DONT KNOW
Consumers are indifferent to a per unit price change
Decrease price is accompanied by decrease in quality demand
32
2 or more people who combine some property labor and skills to jointly own a business is...
S-Corp
I DONT KNOW
Partnership
Coporation
33
Business arrangement sharing in profit and losses control of assets and managerial desicions is
Corporation
Partnership
I DONT KNOW
Co-op
34
When looking to replace old equipment when would renting or leasing equipment be a sound option
I DONT KNOW
When there are few equipment dealers in your area
The work you do is short and seasonal/hours of use is low
When you claimed all of the depreciation from old equipment
35
Which of the following assets cannot be depreciated
Raised Breeding Livestock
Tractor
I DONT KNOW
Irrigation Pumping Unit
36
An estimate of costs and returns associated with a particular enterprise is a
Budget
I DONT KNOW
Book Value
Scheduled Bid
37
A broad statement that shows where you want to be after some period of time is called a
Goal
I DONT KNOW
Analysis Statement
Resource
38
A good set of records will provide the information needed to
I DONT KNOW
All the Above
Make Business Decisions
Obtain Farm/Ranch Loans
39
Which of the following would not be considered a fixed cost of owning a piece of farm equipment
Fuel
I DONT KNOW
Insurance
Taxes
40
The amount in which the value of total assets exceeds total liabilities is called
Credit
Equity
Cash
I DONT KNOW
41
Farm is bought at $2,500/acre value has inflated at annual rate of 4% after 3 years an acre is
$2,704
I DONT KNOW
$2,600
$2,812
42
What are the four factors of production to plan a budget
Assets, Income, Expenses, and Profit
I DONT KNOW
Livestock, Crops, Investments, and off farm income
Capital, Labor, Land, Management
43
A_____payment loan is one only interest is paid each period until a specified time
I DONT KNOW
Secured
Unsecured
Balloon
44
Intermediate liabilities are debt obligations where repayment is
Due from 10 years up to 15 years
Due immediantly upon receipt of an item financed
I DONT KNOW
Due from 1 year up to 10 years
45
Which of the following strategies are used to reduce taxable income
Delay purchases of machinery until the following tax year
I DONT KNOW
Postpone some sales to next year
All the above
46
Hedgers and speculators in the futures market are different in that...
Hedgers are more at risk
Speculators do not produce a product ot sell
Speculators always want the price to decrease
I DONT KNOW
47
Restrictions and personal goals are called
Farm Operation
Product Evaluation
Farm Management
I DONT KNOW
48
The method of accounting that reports income/expenses in the time period they incurred is
Accrual Method
I DONT KNOW
Cash Method
Inventory Method
49
A genreal increase in price levels over time is called
I DONT KNOW
Opportunity Test
Profit
Inflation
50
Corn futures contract is $3.01 local basis is .25 the local cash market was
$3.26
$3.01
$2.76
I DONT KNOW
51
Solvency has been achieved when a farmer has...
I DONT KNOW
Sufficient assets to cover all debts
Sufficient current assets to cover current debts
A positive cash flow
52
The process for estimating the market value of a given piece of property or equipment is called
An Appraisal
Data Collecting
I DONT KNOW
Cash Flow Summary
53
You borrow $ to purchase land you offer the title to the property until the loan is paid it is
I DONT KNOW
Mortage
Sales Contract
Honor
54
An account receivable in a
I DONT KNOW
Liability
Long term debt
Amount owed to a business
55
The most common type of farm lease is the
Livestock Share Lease
Crop Share Lease
I DONT KNOW
Cash Lease
56
Records the value of all goods/services made in a year no matter when sold recorded same year
Accrual Method
I DONT KNOW
Cash Method
57
An advantage of owning farmland versus leasing farmland is
I DONT KNOW
Land can be used as collateral
All the above
Land is a hedge against inflation
58
A cash flow statement for the future should include...
NONE OF THE ABOVE
Depreciation
Net Worth
Net Farm Income
59
You buy 550 lb cows at 1.7 per lb to be fed to 1075 lbs cost of grain 1.2 per lb what breakeven
$1.36 per pound
$1.43 per pound
$1.28 per pound
I DONT KNOW
60
A farm is purchased for $1,000 per acre that value is at annual 4% after five years an acre is
I DONT KNOW
$1,040
$1,217
$1,400
61
Corn90 bushels $140 acre $2.5bushel Soy$110 acre $6bushel What soy yield to have same netreturn
32.5 bushels
I DONT KNOW
25 bushels
39 bushels
62
A projection of all the costs and returns associated with a single type of crop or livestock is
Partial Budget
I DONT KNOW
Cash Flow Budget
Enterprise Budget
63
If a farmer writes a check for $3,500 to pay off the remainder of a tractor loan...
I DONT KNOW
Assets and liabilities are reduced and equity is unaffected
Assets are reduced and equity declines
Liabilities are reduced and equity increases
64
Intermediate liabilities are debt obligations where repayment occurs in a
Period of less than one year
Period of 1 to 5 years
Period of 1 to 10 years
I DONT KNOW
65
What insurance lets producers purchase insurance that'll help reduce exposure 2 production risk
Multiple Peril Crop Insurance
I DONT KNOW
Revenue Insurance
Liability Insurance
66
The economic term used to describe a consumers satisfaction with a product is
Retention
Utility
Capacity
I DONT KNOW
67
Say the government said the max interest rate that ag producers pay is 5% a likely result is
I DONT KNOW
Farmers would borrow more money form banks
Banks would begin requiring better record keeping by produce
Commercial banks would not make loans to farmers
68
The difference between the cash market and the futures market is called
I DONT KNOW
Opening
Closing
Basis
69
The ability to sell all assets at current market value and to cover all debts is called...
I DONT KNOW
Solvency
Luiquidity
Debt Structure
70
Reason to keep business records include all of the following
except
...
To assist in making decisions on what items to produce
To justify a bookkeeper in your business
To comply with tax reporting requirements
I DONT KNOW
71
Assets like land equipment or personal property that is pledged as security for a loan is
Called Expenses
I DONT KNOW
Called Collateral
Called Credit
72
You have a debt of $2,438 that must be paid next moth your debt is listed as
Current Liability
Curretn Asset
I DONT KNOW
Capital Asset
73
The book value of a piece of equipment would be the...
Value that the item currently has on the open market
Cost of the item minus depreciation
Cost of an item plus the total depreciation date
I DONT KNOW
74
An example of real property would be
I DONT KNOW
Land
Farm Equipment
Livestock
75
Calculate annual depreciation of tractor thats $68,000 &has a price of $4,500 after 15 years
$4,133
I DONT KNOW
$4,233
$4,333
76
Reduction in harvested yield before/after the optimum period when estimating cost 4 equipment
Is Inverted Cost of Production
Is Timeliness Cost
I DONT KNOW
Is Delay Costs
77
Another name for a profit and loss statement is a
I DONT KNOW
Income Statement
Pie Chart
Flow Chart
78
When a farmer forward contracts his corn crop what has he done
I DONT KNOW
He has decided to sell his corn on the cash market
He has fixed an after delivery price of the corn
He fixed price he will receive before delivering the corn
79
A financial statement with a list of assists liabilities owner equity&relationship to eachother
Is called a Net Wroth Statement
Is called an Income Statement
Is called a Checking Account Statement
I DONT KNOW
80
The expansion and the liquidation phase of the typical hog market completes a cycle every
1-2 Years
3-4 Years
I DONT KNOW
5-6 Years
81
You couldve invested $20,000 at 6% interest but invested in a farm the interest you lost was
Opportunity Cost
Production Cost
Margin Cost
I DONT KNOW
82
75 acre lot is bought at $2750 acre value is inflated annual rate of 2% whats $ after 4 years
I DONT KNOW
$2,918
$2,805
$2,977
83
Which of the following is a fixed cost
Machinery
I DONT KNOW
Seed
Fertilizer
84
The ability of a business to sell all assets at market value to cover all debts is a measure of
Interest
Solvency
I DONT KNOW
Deflation
85
Difference between a cash price at a location and a specified futures contract price is called
I DONT KNOW
Interest
Basis
Margin
86
Based on the ratio who would a bank likely not lend money
Mark 6:1
Ray 1:6
I DONT KNOW
Todd 1:1
87
An estimate of the fair market value of personal property or real estate is called a
Basis
Lease
Appraisal
I DONT KNOW
88
Reduction in crop quality from an operation not being performed at optimum time is
Scheduling Costs
I DONT KNOW
Penalty Costs
Timeliness Costs
89
The net worth statement for a farm represents
An average of five production years records
The transactions of the farm at a single point in time
A picture of the ongoing previous two years records
I DONT KNOW
90
Average annual cost of owning a piece of equipment is $10,395 what is it when income tax is 28%
$7,458.48
$13,259.52
I DONT KNOW
$10,367
91
Changes in price which tend to follow a predictable pattern within a year is called...
Price Fixing
Price Seasonability
I DONT KNOW
Price Analysis
92
Generally gives a more accurate estimate of annual profibillity of a business or enterprise
I DONT KNOW
Accrual Method
Cash Method
93
An increase in the value of a dollar relative to currency of other countries should result in
Less costly imports to the U.S.
I DONT KNOW
More costly imports to the U.S.
No effect on imports or exports
94
The most common type of lease would be
Livestock Share Lease
Crop Share Lease
I DONT KNOW
Cash Lease
95
This period follows the production cycle of the major enterprise and ends when business is slow
I DONT KNOW
Business Year
Enterprise Year
Fiscal Year
96
A report of revenue and expenses ending with an estimate of net income is a(n)
Tally Sheet
Income Statement
I DONT KNOW
Statement of Cash Flows
97
You buy a cotton picker for $160,000 & sell it in 6 years 4 $40,000 whats annual depreciation
I DONT KNOW
$22,000
$16,000
$20,000
98
An expense that has been incurred but not yet pair is called a(n)
Account Payable
Debit
I DONT KNOW
Asset
99
After land cost machinery cost usually represents ___ percent of remaining farm operation costs
75%
50%
25%
I DONT KNOW
100
A business has adequate liquidity if...
Equity is positive
I DONT KNOW
Value of total assets exceeds value of total liabilities
Generate cash to meet obligation without disruptin operation
101
The change in total cost due to the production of one more unit of output is called
Marginal Cost
Variable Cost
Fixed Cost
I DONT KNOW
102
When demand and supply are equal price is said to be at
Equilibrium
I DONT KNOW
All Time High
Elasticity
103
If beef cattle producers are making an unusually high profit, then one might assume...
A and B
Other Producers will enter the beef cattle business
I DONT KNOW
The supply of beef will increase
104
Accounting period of farm in some instances better fit production characteristics of that farm
I DONT KNOW
Is called a fiscal year accounting period
Is called a calender year accounting period
Is called a cash year accounting period
105
The common types of business ownership do not include which of the following
Sole Proprietorship
Partnership
Owner Equity
I DONT KNOW
106
Which would not be considered a standard operating cost of a piece of farm equipment
I DONT KNOW
Fertilizer
Repairs
Labor
107
On a farm any item of value such as machinery land or cattle would be considered a(n)
Credit
Deduction
I DONT KNOW
Asset
108
The amount of money received from selling a product or service is called
I DONT KNOW
Debt
Income
Cash
109
A budget for watermelons would be termed as a(n)
Expense Budget
Demand Budget
I DONT KNOW
Enterprise Budget
110
Which of the following would cause an increase in the price of commodity
Neither
I DONT KNOW
Decrease in demand with no change in supply
Decrease in supply with no change in demand
111
In preparing a cash flow plan one should not include which expense items...
Cash paid for machinery purchases
I DONT KNOW
Principle payments on a long term basis
Machinery Depreciation
112
Physical or financial property that has value and is owned by an individual or business is
Called Tax
I DONT KNOW
Called Asset
Called Liability
113
Plan of action 4 business that is projections of income/expenses 4 all or part of a business is
Budget
Audit
Business Survey
I DONT KNOW
114
If a farmer forward contracts his cotton what has he done
Is storing the cotton
Fixed the price after delivery
I DONT KNOW
Fixed the price before delivery
115
Which of the following is known as the basic equation of accounting
Profit=Income - Debt
Assets=Liabilities + Owner Equity
I DONT KNOW
Liabilities=Debt × Years to Payout
116
When determining Machinery Replacement Strategies, TIS costs refer to...
I DONT KNOW
Trade in Strategy
Taxes, Insurance, and Shelter
Tires, Interest, and Seasonal
