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Farm Business Management- Analysis of Records Flashcards | StudBud
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Farm Business Management- Analysis of Records
Farm Business Management- Analysis of Records
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1
What type of liability is "interest on short term loans"?
Deferred Liability
Ending Liability
Accrued Liability
A Prepaid Liability
2
Which of the following would appear on an income statement but NOT on a cash flow budget?
Inventory changes
Gain or loss on sale of capital asset
Depreciation
ALL of the above
3
Rate of return on assets is _____.
The total of all assets divided by total liabilities
Result of letting the farm use all of your capital assets including equity
The perfect return on the total amount of money invested in total assets
What you have left over once you've paid all debt
4
Another term for net worth is _____.
Owner Value
Net Return
Owner Equity
Net Farm Income
5
Expenses that would be accounted for on an income statement include all of the following except ____.
Part-Time Hired Labor
Fruit Purchases
Prinicple Payments
Fertilizer
6
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
Dollars received per ton of hay sold
Value of crops produced per acre
7
If the debt/asset ratio is increasing, then the debt/equity ratio will be ____.
Constant
Indeterminate, need more information
Increasing
Decreasing
8
Which of the following is NOT included as an expense on the net farm income statement?
Depreciation
Principle payments made on loans
Interest payments made on loans
The cost of supplies used but not yet paid for
9
Which type of financial statements would be most useful for keeping records of expenses?
Statement of Owner Equity
Statement of Cash Flows
New Worth Statement
Net Income Statement
10
A ranch that replaced a large number of fences and corals would most likely see which of the following ratios increase?
Operating expense ratio
Depreciation expense ratio
Interest expense ratio
Net farm income from operations ratio
11
Which type of financial statements would be most useful for keeping records of expenses?
Statement of cash flows
Net income statement
Statement of owner equity
Net worth statement
12
A cash flow analysis of an investment in a new capital asset should include projections for _______.
One year on a monthly basis
One year for a whole year only
Several months
Several years
13
Which of the following is an example of a noncurrent liability?
Loan on farm machinery
Prepaid expense
Farm machinery
Loan on feeder livestock
14
Principal is _____.
A standard or a rule that guides behavior
The amount of money actually borrowed from a lender
The amount of money you actually repay at the end of a loan transaction
Also known as the present value of a uniform series
15
Financial statement adjusts farm receipts & expenses in a specified time period to get a net farm income from operations
Balance Sheet
Statement of Owner Equity
Income Statement
Statement of Cash Flow
16
Of the following, which is the most liquid asset?
Breeding Livestock
Balance in Checking Account
Farm Machinery
Feeder Livestock
17
Which of the following assets would have the same value using either a cost or a market based valuation?
Prepaid expenses
Land
Purchased breeding livestock
Machinery
18
When preparing a cash flow budget it is important to _______.
Take into account the expected timing of cash inflows and outflows
Estimate expected cash inflows and outflows for a whole year only
Include all noncash expenses
Include only non cash revenues
19
A balance sheet will list which of the following terms?
Liabilities and Expenses
Assets and Liabilities
Receipts and Expenses
Expenses and Assets
20
A cash flow budget can be used to monitor the farm business by _____.
Comparing actual cash inflows & outflows to the budgeted monthly cash flows
Compare the projected ending cash balances to actual balances each month
Comparing actual cash inflows and outflows to 10-year averages
Comparing actual selling prices to those assumed in the cash flow budget
21
The degree to which a farm's assets adequately cover or exceed its liabilities is referred to as _____.
Solvency
Working Capital
Profitability
Liquidity
22
Which of the following does NOT analyze the solvency of the farm business?
Turnover ratio
Equity/asset ratio
Debt/asset ratio
Debt/equity ratio
23
Which of the following best describes a balance sheet?
It shows changes in assets and liabilities over the last accounting period
It shows assets and liabilities at a point in time
It shows profit for the last accounting period
It shows changes in assets and liabilities over a period of time
24
Partial budgets are useful in evaluating changes such as ______.
Determining how to guarantee the profitability of an enterprise
The useful life of an asset
Buying new equipment or machinery
The depreciation of an asset
25
The current ratio is a measure of a farm firm's ______.
Level of total debt to total assets at a present time
Return on investment in current assets
Ability to pay short-term credit obligations
Return on equity
26
This financial statement lists assets, liabilities, and owner equity at a particular time.
Statement of Cash Flow
Statement of Owner Equity
Income Statement
Balance Sheet
27
A farm's asset turnover ratio measure _____.
How many years it takes to pay for machinery and buildings
How often the replace machinery and equipment
How much gross revenue is generated for each dollar invested in farm assets
How much debt the farm has for each dollar of asset
28
A tool used to analyze change in the busniess operation is ____.
A Profit and Loss Statement
ALL of the above
A Partial Budget
An Income Statement
29
An organized list of the value of all assets and all liabilities used by an accounting system is called ______.
A debit
A chart of account
A balance sheet
An income statement
30
If a business has working capital greater than $0, its current ration will be _____.
Equal to one
No relationship between the amount of working capital and the current ratio
Greater than one
Less than one
31
A cash flow budget can be used to ______.
Estimate when excess cash may be available so you can plan where to invest
Estimate when and how much debt can be repaid during the year
Estimate when and how much money will need to be borrowed during the year
ALL of the above
32
Which of the following items on a balance sheet would NOT be considered when makeing accrual adjustments to net income?
Accrued interest
Change in market value of land
Inventories of market livestock
Pre-paid expenses
33
The “cost” value shown on a balance sheet for an asset such as a tractor is equal to __________ .
The original purchase price
The cost of a new tractor of the same size
The original purchase price less depreciation expense taken to date
The original purchase price plus cost of all repairs to date
34
Which of the following financial statements helps managers understand the sources and uses of cash?
Statement of Cash Flow
Income Statement
Balance Sheet
Statement of Owner Equity
35
The Net Worth Statement of Balance Sheet shows the financial condition of a business __________ .
For the Accounting Period
At a Particular Point in Time
For a Calendar Year
At a Period of Time Defined by the Creator
36
An enterprise budget _____.
Is the tool in analyzing only changes in the business operations
Shows expected returns & costs associated with specific production activity
Is a record of past preformance
A physical and financial plan for the farm buisness for a period of time
37
The original purchase price for land is considered its _____.
Depreciation Value
Acquisition
Basis
Net Income Value
38
Developing an accrual adjusted income statement requires ______.
Inventory records, cash revenue, and depreciation records
Inventory records, cash expenses, and depreciation records
Depreciation records, cash revenues, and depreciation records
Inventory records, cash revenues, and cash expenses
39
The degree to which a farm's assets adequately sercure its debts is referred to as ______.
Efficiency
Liquidity
Solvency
Profitability
40
For capital assets the difference between the purchase price and the sales price is taxed as _____.
Capital Returns
Expansion of Net Worth
Capital Deductions
Capital Gains
41
A net worth statement or balance sheet reveals ______.
NONE of the above
Cash income by subtracting total cash expenses from total cash receipts
Net farm income by subtracting total expenses from total revenues
Owner equity by subtracting total liabilities from total assets
42
Another term which has the same meaning as owner's equity is ____.
Total Liabilities
Total Asset Value
Net Worth
Net Farm Income
43
A projected negative cash balance at the end of the year can be made positive by _____.
Carrying over less inventory of stored grain to the following year
Lengthening repayment periods on term loans
Delaying proposed purchases of capital assets
ALL of the above
44
The best description of a business which has increased its debt/asset ratio is one which has _____.
Increased its debt relative to total assets
Sold some assets
Increased its debt
Purchased more assets
45
The size of the minimum cash balance a business should try to show at the end of each budgeting period will depend on
The number of acres of farmland
The form of farm business organization the farm chooses
The number of people employed on the farm
The total dollars of cash inflows and outflows projected
46
A statement of owner equity shows
Owner equity for the past 20 years
A list of all assets and liabilities
The valuation
The sources and amounts of changes in owner equity
47
A "contingent" or "deferred" income tax liability is one that ______.
Is owed but not yet paid
Would be due under cash accounting but not accrual accounting
Represents delinquent taxes from past years
Would be owed if and when an asset is sold
48
Which of the following would NOT appear on a cash flow budget?
Family living expenses
Inventory change
Cost of new tractor
Feed purchases
49
This financial statement lists cash receipts and expenses of a farm during a specifed time period.
Statement of Owner Equity
Income Statement
Balance Sheet
Statement of Cash Flow
50
Which of the following is a noncurrent asset?
Feed bill at a local feed store
Feed inventory
A 36-month certificate of deposit
Feeder cattle
51
Return on investment is _____.
The net profit or net loss realized from an investment or assets
A number that represent you ability to meet all debt
Always going to be a positive number
Something that agriculuralists never figure out because it's always too low
52
A projected negative annual cash flow indicates ______.
Net farm income will be negative
Projected asset values are less than projected liability values
Depreciation expense is too high
Projected cash inflows are less than projected cash outflows
53
Which of the following is NOT one of the basic financial statement?
Income Statement
Statement of Owner Equity
Balance Sheet
Monthly Bank Statement
54
Current farm assets are typically valued at ______.
Depreciated Value
Cost
Cost Less Depreciation
Market Value
55
Which of the following is an example of a current asset?
Dairy Cows
Farm Buildings
NONE of the above
Farm Machinery
56
While financial records are critical for business management, in order to have complete understand, managers also need..
Machinery Records
Inventory Records
Physical Records
Input Records
57
The term Debt Coverage Ratio measures _______.
The ability to pay down debts over a given term
The number of years needed to pay down intermediate and long term debt
The ability to pay all intermediate and long term debt payments
The term, listed in months, required to cover debt
58
The formula used to calculate break-even prices to cover total operating costs is __________ .
Total operating costs plus (price times yield) = 0
Total cost minus (price times yield) = 0
(price times yield) minus total cost = 0
(price times yield) minus total operating costs = 0
59
A cash flow budget should contain all of the following except _____.
Principal payments on machinery loans
Cost of new farm machinery to be purchased
Diesel fuel
Depreciation
60
Which of the following is a measure of economic efficiency.
Net farm income
Gross revenue per year of labor
Net cash flow
Change in owner equity
61
Another name for a balance sheet is ______.
Net Worth Statement
Statement of Owner Equity
Statement of Cash Flows
Income Statement
62
A lender would prefer farm assets valued at __________ value on a balance sheet that is part of a loan application.
Cash
Market
Cost
Accrual
63
The financial statement that measures the profit of a business is the __________ .
Statement of Owner Equity
Income Statement
Balance Sheet
Statement of Cash Flow
64
Inventory changes and changes in the value of prepaid expenses would be used to calculate which of the following?
Gross Cash Income
Accrual Adjusted Net Farm Income from Operations
Depreciation
Net Cash Income from Operations
65
The "cost" value of farmland can change due to _______.
Increase in property taxes
Changes in the selling price of farmland
Cost of nondepreciable improvements made, such as terraces and earthen dams
Accumulated depreciation
66
Which financial statement assess a specific point in time rather than a period of time?
Statement of cash flows
Balance sheet
Statement of owner equity
Income statement
67
Which of the following items on a balance sheet would NOT be considered when making accrual adjustments to net income?
Pre-paid expenses
Change in market value of land
Inventories of market livestock
Accrued interest
