Agribusiness Management Questions



Agribusiness Management Questions

Multiple Choice

1. The demand for pork is determined by:

a. the price of pork.

b. income of the purchaser.

c. the price of substitute products.

d. all of the above.

2. A dairy cow held for breeding and production purposes is known as a:

a. short-term asset.

b. intermediate asset.

c. capital asset.

d. long-term liability.

3. Cattle futures are publicly traded on the:

a. New York Stock Exchange.

b. NASDAQ.

c. Chicago Board of Trade.

4. Which state is the leading beef cattle state?

a. Kentucky

b. West Virginia

c. Missouri

d. Texas

5. Which state is the leading dairy state?

a. California

b. Wisconsin

c. New York

d. Pennsylvania

6. Vertical integration is most common in which of the following agricultural enterprises?

a. horses

b. beef

c. grain

d. poultry

7. Which of the following business types allows the most liability protection for the owners?

a. partnership

b. sole propietorship

c. corporation

d. partnership

8. Which county produces the most poultry products in West Virginia?

a. Grant

b. Pendleton

c. Hampshire

d. Hardy

9. Land is considered to be a:

a. short-term asset

b. long-term asset

c. intermediate-term asset

d. short-term liability

10. Which of the following would most likely lead to an increase in soybean prices?

a. increased industrial use of soybean oils

b. increased number of hogs being fed

c. a small soybean crop

d. all of the above

11. Which of the following is the equation for determining net worth?

a. Net Worth = Assets - Liabilities

b. Net Worth = Assets + Liabilities

c. Net Worth = Assets / Liabilities

d. Net Worth = Liabilities - Assets

12. Solvency of a business can be determined by evaluating the:

a. cash flow statement

b. debt to equity ratio

c. price to earnings ratio

d. net income

13. A plan of action for a business is known as a:

a. balance sheet

b. cash flow statement

c. budget

d. financial statement

True / False

14. There are three types of goals known as short-term, intermediate, and long-term.

a. true

b. false

15. Money that you owe for operating expenses is known as accounts receivable.

a. true

b. false

16. Inventory values for December 31 of a given year should become the beginning values for the following year on January 1.

a. true

b. false

17. A written business agreement or contract should protect the interests of all parties involved in a business venture.

a. true

b. false

18. Depreciation is the amount of value subtracted from a capital asset annually due to another year of use and age.

a. true

b. false

19. For items purchased for resale you must have a record of the purchase cost for tax purposes.

a. true

b. false

20. Payments received from the government are taxable forms of income.

a. true

b. false

Interpretation Questions

Answer questions 21 –25 using the attached income statement.

21. How many total dollars were taken in from all livestock sales?

a. $35,000

b. $1,750

c. $33,250

d. $36,750

22. How much was spent (total farm expenses) for each dollar received (total farm receipts)?

a. $ .43

b. $ 2.35

c. $ 4.70

d. $ .86

23. Hay represented what percentage of total farm receipts?

a. 24.7%

b. 404%

c. 49.4%

d. none of these

24. Depreciation charges reduced taxable income by how much?

a. $16,498

b. $28,998

c. $12,500

d. $21,502

25. What was the net income of the farm after all cash and non-cash expenses and adjustments?

a. $28,998

b. $50,500

c. $12,500

d. $16,498

Income Statement

Tweedle Dee Farm

1999

Farm Receipts Dollar Amount

Calves $ 35,000.00

Cull Cows $ 1,750.00

Hay $ 12,500.00

Custom Work $ 1,250.00

Total Farm Receipts $ 50,500.00

Farm Expenses Dollar Amount

Fertilizers $ 2,500.00

Vet. / Medical Supplies $ 1,652.00

Insurance $ 3,200.00

Fuel, Lube, Repairs $ 3,950.00

Taxes $ 2,150.00

Labor $ 1,550.00

Interest $ 6,500.00

Total Farm Expenditures $21,502.00

Net Cash Income $28,998.00

Depreciation $12,500.00

Net Farm Income $16,498.00

Answer Key

1. D

2. C

3. C

4. D

5. A

6. D

7. C

8. D

9. B

10. D

11. A

12. B

13. C

14. A

15. B

16. A

17. A

18. A

19. A

20. A

21. D

22. A

23. A

24. C

25. D

Reference:

1. Farm and Ranch Business Management, 3E, Deere & Company, Chapters 1 - 6

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