FFA Farm Business Management Contest Practice Exam

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• A partial budget is used to evaluate a change in some aspect of the business such as purchasing new equipment. Which of the following best describes a partial budget?
• What term describes business profits paid to corporate shareholders based on their number of shares?
• A $10,000 investment at a 10% return will take approximately how many years to be worth $20,000?
• A put option on corn gives the holder the right to sell the futures contract at a fixed price. Which option describes this feature?
• Labor expense per head of hogs sold is an example of which cost concept?
• An income statement is also commonly called what?
• A constant payment loan with payments consisting of principal and interest is called
• A forward contract is best described as
• Equity is defined as the:
• The nearby hog futures contract closed at $49.80 with a local basis of $1.85 under. The local cash market price was what?
• If two curves touch at a point and do not cross, the mathematical term for the point is
• An asset was sold for $1200. If $700 had been claimed in depreciation and a $200 net gain was realized, what was the original purchase price of the asset?
• Economics is most often defined as the study of how people:
• If fixed annual costs increase, the minimum acres required to justify buying the combine will:
• A W-2 form is:
• Which item would typically be considered a current asset on a balance sheet?
• The tax deductible allowance for the loss in value of a fixed asset due to wear and tear or obsolescence is known as
• Economics of size suggests which of the following about larger firms?
• A farmer can reduce income tax liability by which actions?
• Typically a graph of which economic concepts slopes upward and to the right when graphed in relation to quantity of output?
• Who generally seeks to earn profits as innovators and risk takers?
• Two soybean futures contracts equal how many bushels?
• Suppose the demand for eggs is given by Qd=100 - 2P. What is the price if quantity demanded = 96
• Cash flow problems usually occur when the loan repayment schedule is longer than the economic life of an investment.
• In market terminology, which marketing function is associated with stabilizing prices through stockpiling?
• Which term describes the legal process by which a lender claims a borrower's property if a loan is not repaid?
• A greater willingness and ability to buy consumers to purchase a given product is shown graphically as a shift
• In a market, the price of pork is determined by
• Which of the following best defines basis in futures markets?
• The term that describes the price difference between a local cash price and the futures price is what?
• The portion of land debt due after this year is classified as which?
• Which statement best defines the equilibrium point in a market?
• A loan to purchase seed, fertilizer, and chemicals is generally called?
• Which tax is most commonly associated with funding local government operations like schools and cities?
• In the feeder pig example, what was the average final weight of the slaughter hogs?
• The estimated total value of a farm business is called what?
• Which of the following are bought and sold on the Chicago Board of Trade?
• Assets are which?
• Money that must be deposited to show good faith in a purchase is called
• Break-even analysis determines the yield level at which revenue just covers total costs. This statement is:
• Cooperative profits can be paid back to customers using which mechanism?
• Wages or salaries that are lost as a result of attending college instead of working represents
• Which term matches 'a loan repayment that consists of a fixed number of equal payments over time'?
• Which statement best describes market demand for a product?
• If a debt is due within the next 12 months, it is classified as which?
• Which of the following would most likely be considered a fixed cost?
• Monies owed to a business but not yet paid are called
• Which statement best describes economies of size?
• In an ordinary corporation, ownership and voting are based on which structure?
• A mortgage is
• Market demand for peanut butter is defined as which of the following?
• In economics, costs include
• Which term describes the borrowed amount in a loan payment schedule?
• The payback analysis shows the time for cash income from the investment to return the initial investment outlay.
• In the break-even example, what is the total revenue per acre at break-even?
• A profit and loss statement is also known as which financial statement?
• To calculate the value of a $1500 investment at 7% for 20 years, one would use?
• Profit from a production decision increases as long as which condition holds?
• Which of the following correctly identifies what the Chicago Board of Trade is associated with in the provided material?
• The debt/equity ratio equals which of the following?
• What is the correct description of a loan that is backed by the borrower’s property as collateral?
• Which cost category changes with production volume?
• If a soybean futures contract size is 5,000 bushels, how many bushels are in three contracts?
• Estate planning typically includes all of the following EXCEPT which?
• The size of one soybean futures contract on the Chicago Board of Trade is
• If total assets exceed total liabilities, the farm’s financial position is said to be
• Which financial tool evaluates potential changes in farm operations by comparing expected costs and benefits?
• An increase in the value of the US dollar relative to currencies of other countries should result in which of the following?
• For a farm business, total revenue minus total cost equals:
• A future borrowing needs of a business can best be determined by looking at which financial statement?
• In a hedge, a farmer sells futures at 5.35 and buys back at 4.85, then sells cash soybeans at 5.15. What is the net price per bushel received?
• What term describes money provided to or invested in an agricultural business by the owners?
• Principal and interest that must be paid within a year are examples of
• All lease payments are considered an ____ for tax purposes.
• In the break-even example, what price per bushel is used to compute break-even yield?
• Net worth is also known as what?
• Total revenue is defined as which of the following expressions?
• If total assets are $321,000 and total liabilities are $160,500, what is equity?
• In business, which group is most associated with innovation and risk-taking to earn profits?
• A loan used to buy seed and fertilizer is generally called what?
• A local elevator offers to buy corn at 25 cents under the March futures price for a future sale, with free pickup. The 25-cent figure most likely represents what?
• Lenders want to see a cash flow to determine
• Cash income minus cash expense equals
• If the demand for pork increases while supply remains unchanged, the price tends to
• Which statement correctly describes the debt/equity ratio?
• Accounts receivable are
• What is the total cost per acre for the farmer given fixed costs of $200 and variable costs of $400?
• An annuity is a stream of payments made at regular intervals.
• Farmers are usually exempt from which tax on farm expenses?
• Which of the following is bought and sold on the Chicago Board of Trade?
• A cash flow summary shows cash inflows of $10,000 and cash outflows of $12,000. Which is true?
• Which statement best describes an annuity?
• Negative cash flow in a farm business means which of the following is true?
• Farmers are usually exempt from paying which tax on farm expenses?
• Total assets of $550,000 and equity of $200,000 imply total liabilities of
• When a farmer pays a loan in full, the part of the payment equal to the amount borrowed is called what?
• Patronage refunds are distributed to cooperative members based on what criterion?
• The primary source of funds for schools, cities, and countries is which tax?
• Accrued interest is always which?
• The equilibrium point is defined as which of the following?
• Which loan type is commonly used to finance day-to-day farming inputs such as seeds and fertilizer?
• For maximum net returns, a farmer should substitute machinery for labor when
• Which concept explains why a dollar received today is worth more than a dollar to be received in the future?
• Financial, opportunity, cash, and economic are terms used to describe different types of the following for a farm firm?
• Which statement best defines a mortgage?
• Which is an advantage of a sole proprietorship?
• Current assets typically include which of the following?
• Inflation causes the value of money to decrease.
• Opportunity cost is normally this kind of cost for a farmer.
• An enterprise budget helps a farm manager evaluate which of the following?
• Net worth of a farm or agricultural business is equal to
• An alternative name for a financial statement is which of the following?
• What is the future value of $1000 placed in a 5% CD for one year?
• Trading products without using money is best described as
• Most farms in the US are organized as which form of business?
• In the asset scenario, what is the gain realized on sale?
• If the quantity supplied for a product cannot change when price changes, which statement is true?
• Which asset is most likely to qualify for depreciation for tax purposes?
• If a business's total assets = $400,000 and total debt = $100,000, the debt-to-equity ratio is
• The decision to apply fertilizer should be based on comparing the added cost to what potential benefit?
• If current assets have increased more than current liabilities, what happened to liquidity?
• A short-term loan is generally called
• The financial method of reporting income in the year cash is received is known as?
• If the futures price is 52.00 and the basis is 2.50 under, what is the local cash market price?
• Which tool would you use to estimate the profitability of a single enterprise, such as hog production, within a mixed crop and livestock operation?
• The marginal net benefit of an activity for a business firm is positive if the activity:
• In hog production, which item is most likely a variable expense contributing to diminishing returns within a year?
• If total assets increase by 50,000 and total debt remains the same, what happens to equity?
• The present value concept is used to determine how much to invest today to reach a future amount.
• What term describes the total value of all assets owned by a farm business at a specific point in time?
• An elevator quotes the price per bushel of soybeans at 25 cents under November futures. The 25 cents is the
• Which item is typically considered a current liability on a farm balance sheet?
• Which expression represents a linear relationship between two variables y and x?
• What is the variable cost per acre in this scenario?
• The marketing function that tends to regulate supply and provide a stable market price is what?
• If a trader sells a futures contract, what is their market position and obligation?
• What measure would increase if asset values rise while liabilities remain constant?
• Which item would be most directly financed from an operating loan?
• The nearby hog futures contract closed at $49.80 with a local basis of $1.85. What was the local cash market price?
• If a soybean producer expects to receive $5.50 per bushel for his/her soybeans, has total fixed costs of $60/acre and has total variable costs of $160/acre, the expected break-even soybean yield for this producer is
• Which of the following would cause a shift to the right of the market demand curve for a normal good?
• Solvency is best measured by
• Which term is commonly used to describe the owner's claim on assets after all liabilities are paid?
• The price of output multiplied by the quantity of output equals which measure?
• A statement of financial condition or balance sheet is also called
• A partial budget is?
• The strike price is the specified price which an option buyer
• Purchase of a put option in corn means what?
• Cooperative profits can be paid back to customers using what mechanism?
• In which market structure does an individual seller typically have very little control over the price received for their product at a given point in time?
• A vertical supply curve for a product indicates
• A demand curve showing that consumers will buy the same quantity regardless of price is described as:
• Direct-marketing customers for a sweet corn farmer are typically which group?
• An investment is recovered when the cumulative cash inflows equal the initial outlay.
• Solvency is a measure of a firm's ability to pay its which?
• If a farm has assets of $800,000 and liabilities of $420,000, the net worth is
• What is the term for the difference between total assets and total liabilities for a farm business?
• Net worth is defined as the market value of assets minus liabilities. Which option best describes this?
• A stronger US dollar relative to other currencies generally leads to which outcome for US exports?
• What is the term for a governmental tax on imports?
• In the soybean break-even calculation, which costs are included to determine total cost per acre?
• When local soybean harvest size exceeds storage capacity, what typically happens to the basis?
• In the feeder pig example, what was the average initial weight of the feeder pigs?
• Which term describes the process of allocating the cost of a fixed asset over its useful life?
• A grain farm can produce corn yielding 150 bushels per acre at a total cost of $300 per acre. If corn sells for $2.00 per bushel, what is the net return per acre for the corn crop?
• Which two general accounting methods are used to report business income?
• The net worth of a farm or agricultural business is equal to which of the following?
• Which budget type projects expected cash inflows and outflows over a period?
• Which statement is true for a balance sheet?
• The method of valuing farm inventories by deducting depreciation from the cost of the items is known as which method?
• The price at which market demand will likely equal market supply is called the
• A business with a current ratio of 1:1 has working capital of how much?
• Using the same eggs demand function, what is the price when Qd equals 0?
• What is usually the first step in making a managerial decision?
• A multi-year loan typically used for purchasing land is called
• Cash is an example of which asset type?
• What term describes profits paid to corporate shareholders based on the number of shares they own?
• A mortgage is best defined as what?
• Which statement best describes patronage refunds?
• If corn yields 150 bushels per acre and sells for $2.00 per bushel with total cost per acre of $300, what soybean price per bushel would yield the same net return per acre if soybeans yield 50 bushels per acre and cost $300 per acre?
• Principal and interest that must be paid within the year are examples of which type of obligation?
• If the local harvest exceeds storage capacity, the market basis is expected to do what?
• A partial budget is used to evaluate what?
• For a soybean enterprise with fixed costs of $50 per acre, total variable costs of $4.00 per bushel, and expected yield of 50 bushels per acre, the break-even price per bushel is
• Accrued interest is always classified as which type of asset?
• A cash flow analysis may help to identify
• In business accounting, which of the following is typically categorized as either fixed or variable?
• A high level of current assets relative to current liabilities indicates good which of the following?
• Discounting can tell a person what an amount of money is worth now and how much to invest now in order to have a set amount later.
• Patronage refunds are most typical of which business form?
• When you ______ a sum of money, you are calculating the value of money at a future time.
• Which statement describes assets?
• A measure of a farmer's ability to pay their bills this year is given by the farmer's
• Cash forward contracts primarily help a producer manage which risk?
• Working capital is defined as which of the following?
• Net worth of a farm or agricultural business is equal to
• Most farms in the United States are organized as which type of business?
• The portion of land debt due after this year is classified as which?
• Under which condition would an increase in the quantity of cantaloupes produced likely raise profits?
• If you have $1,800 in benefits and $1,450 in costs, the benefit/cost ratio is approximately
• The financial method of reporting income by recording income in the year that the cash is received is known as this method
• Which term describes the various types of costs that a farm firm faces?
• A business shows total assets of $321,000 and total liabilities of $160,500. The debt/equity ratio is?
• An annuity is best described as what?
• The manager of a cooperative is generally hired by whom?
• In planning terms, what term describes the process of arranging for the transfer of assets after death?
• An appreciation of the US dollar relative to foreign currencies is expected to cause what effect on exports?
• If a corn farmer has a yield of 200 bushels per acre with total fixed costs of $200 per acre and total variable costs of $400 per acre, what is the average total cost of corn production per acre?
• In the grain combine scenario, which cost is a fixed annual expense?
• In the loan example, what was the total interest charged during the year?
• A loan to buy seeds and fertilizer is generally called what?
• In which market structure does an individual seller typically have little control over the price they receive for their product?
• Local governments such as schools and cities primarily fund their activities through which tax?
• The value of a resource in its next best use is called what?
• Which of the following best describes current assets?
• Which financial metric is most directly affected by asset values?
• A soybean producer expects to receive $5.50 per bushel, fixed costs $60 per acre, and variable costs $160 per acre. What is the expected break-even yield (bushels per acre)?
• Which term describes an amount that is owed and payable to someone else?
• Cash forward contracts normally reduce which risk for a producer?
• In a crop-share lease, the tenant pays the landowner which of the following?
• At the beginning of last year, a farmer had an outstanding loan of $100,000. The interest rate was 10% APR. If the farmer made one loan payment at the end of the year of $25,400 what was the outstanding balance at the end of the year.
• What is collateral?
• Hedgers usually take on which type of risk?
• Things of value that are owned are generally referred to as
• Property or anything else of value that is pledged to a lender as loan security is
• Which of the following is a key advantage of a sole proprietorship?
• An income statement can also be called?
• The financial method of reporting income by recording income in the year that the cash is received is known as this method
• Total fixed costs usually
• Which item is typically not classified as a current asset?
• A firm known as a conglomerate is:
• Based on the given costs, what is the minimum number of acres to justify buying the grain combine?
• Items that a farmer can convert into cash within a year are typically called
• What term describes cooperative profits paid back to customers based on their purchases?
• Assets are defined as which of the following?
• Which option contains terms that are most alike and have similar meaning?
• If a dairy farmer's cost of production is $9.00 per hundredweight and costs increase by 12%, what is the new cost per hundredweight?
• Basis is defined as the difference between which two prices for the same commodity?
• Which of the following is most likely to qualify for depreciation for tax purposes?
• An enterprise budget is used to provide which of the following?
• What is the standard size of one soybean futures contract on the Chicago Board of Trade?
• If a producer's debt-to-asset ratio decreases, what happens to long-term credit riskiness?
• With fixed costs of $80 per acre, variable costs of $120 per acre, and price of $4 per bushel, the break-even yield per acre is:
• Total revenue is calculated as price times which quantity?
• A commodity with elastic demand; a 10% decrease in supply will typically result in what price change?
• Which type of planning focuses on how a person's assets are distributed at or after death?
• Things of value that are owned are generally referred to as
• Depreciation on an asset affects which line item on the income statement?
• Which metric is commonly used to assess solvency focusing on long-term financial strength?
• A contract between a farmer and the local elevator to deliver grain at a specified price and time is called what?
• Economies of size indicate that bigger businesses use assets more efficiently than smaller businesses.
• A decline in the value of the dollar relative to the Japanese yen makes U.S. agricultural exports to Japan:
• A farmer can reduce income tax liability by which actions?
• If benefits are $1,000 and costs are $800, the benefit-cost ratio is 1.25 to 1.
• If electricity expenses rise from $4,000 to $4,400, what is the percentage increase?
• If total assets are 500 and total liabilities are 320, net worth is
• Which factor is least likely to influence the break-even rate charged by a custom harvest operator?
• If the market price is above the equilibrium price, what typically occurs in the market?
• Current assets are best described as what?
• What is the basic tool used to analyze a change in farm operations?
• Equity is which of the following?
• Which concept explains that money available now is more valuable than the same amount in the future?
• Which accounting method recognizes revenue when earned and expenses when incurred?
• Self-employment tax for farmers replaces which tax paid by employees?
• Property tax is a major revenue source for which level of government?
• The process of combining inputs and converting them into goods or services in a farm business is called:
• Which contract is bought and sold on the Chicago Board of Trade?
• Farmers report farm income and expenses on which form?
• Fixed costs are best described as costs that do not change with output in the short run. Which option reflects this?
• A business with a current ratio of 1:1 has working capital of?
• Which of the following is NOT a standard component of a partial budget?
• A farmer sold a depreciable asset for $1,500, had claimed $700 depreciation, and reported a taxable realized gain of $200. What was the asset's original cost?
• Lenders use a cash flow to determine?
• An operator of a farm who rents the farm from someone else is also known as
• When evaluating sources of capital, what is typically the biggest factor to consider?
• Which financial instrument gives the holder the option to sell futures as a hedge against falling prices?
• If eggs demand function is Qd=100 - 2P, what is the quantity demanded when price is $5?
• An investment with a benefit-cost ratio greater than one indicates a potentially acceptable project.
• Who is generally responsible for hiring the manager of a cooperative?
• Given local cash hog price 47.25 and a basis of 1.75, the nearby futures price is which value?
• If original price is $1700 and depreciation $700, what sale price would yield a net gain of $200?
• The law of demand states
• Patronage refunds are paid to which group in a cooperative?
• Which of the following is NOT considered a traditional factor of production in farming?
• Which financial statement shows a company's revenues and expenses over a period of time?
• In futures trading, the basis is defined as the difference between which two prices?
• An income statement is also called
• The statement or summary of all expected returns and costs associated with the production of hogs on a corn/soybean/hog farm is known as
• An income statement is also called
• An enterprise budget is best described as?
• If a business becomes insolvent this means that
• Which item is explicitly mentioned as being traded on the Chicago Board of Trade in the material?
• An annuity is best described as what?
• In the feeder pig scenario, the feed costs were $50.00 per hog. The feed cost per pound of gain was
• Market equilibrium occurs when which condition holds?
• A cash flow budget is?
• The nearby futures market price closed at
• Trading products without money is known as
• For farm business income taxation purposes, depreciation is considered what?
• For a farm business, which of the following is typically categorized as either fixed or variable?
• In futures terminology, which term denotes the difference between the futures price and the local cash price?
• If there is a linear relationship between y and x, which expression represents this relationship?
• Which ratio compares total liabilities to owner's equity?
• The business expense arising from borrowing money is:
• The price paid for an option is known as the
• If total assets are $321,000 and total liabilities are $160,000, what is the owner's equity?
• A cash flow budget is best described as what?
• If net earnings for the year were $30,000 and the annual rate of return on assets is 5%, the implied total assets are what?
• In marketing, the difference between a futures contract price for a given delivery month and a current local cash market price is called
• A mortgage is best described as which of the following?
• Which term is another name for a profit and loss statement?
• If you wanted to assess the financial impact of adding a new crop enterprise, which budget would you use?
• Which statement about costs is true in economics?
• In a graph, if two curves touch at a point but do not cross, that area is called
• What is an annuity?
• In evaluating capital sources, which factor is commonly labeled as the most important to compare across options?
• A farm has total assets of 500,000 and total liabilities of 420,000. The net worth is
• The financial method of reporting income in the year cash is received is known as which accounting basis?
• A grain farmer who signs an agreement to deliver corn in three months at a fixed price has entered into which type of contract?
• Which of the following is not a typical category of resource that must be managed in a business?
• Economies of size also suggest that bigger businesses use assets more efficiently than smaller ones.
• The price paid for the right but not the obligation to buy or sell a futures contract is called what?
• A cash flow budget is best described as what?
• Suppose a dairy farmer's cost of milk production increased by 6.5% from $8.50 per hundred weight last year. What is the new cost?
• Cash income minus cash expenses equals?
• What is the fixed cost per acre in this scenario?
• Which term describes a liability due after one year?
• Which of the following could serve as collateral for a loan?
• Economies of size indicate that bigger businesses use management resources more efficiently than smaller ones.
• If the futures price increases while the cash price remains unchanged, what happens to the basis?
• Patronage refunds are a method cooperatives use to return profits to whom?
• Which of the following, for a business, is typically categorized as either fixed or variable inputs?
• A farm firm that has relatively more equity than another farm firm is
• Which equation represents working capital?
• What is another common name for the income statement?
• Which tax form is used by farmers to report income and expenses?
• Fertilizer should be applied as long as what condition holds?
• Which term describes the value remaining in the business after all liabilities are subtracted?
• During inflation, the purchasing power of money generally decreases.
• Which item is not depreciable on farm financial records?
• Comparing one financial statement figure to another is usually called?
• What is the biggest factor to consider when evaluating sources of capital?
• In futures markets, the term basis represents
• An ordinary corporation is typically owned by investors who are not customers and is controlled on what basis?
• What term refers to property or anything of value pledged to a lender as loan security?
• The value of eliminating the next best alternative forgone when making a choice is called what?
• Prices in free markets are determined by the interaction of which two forces?
• The difference between futures price and current local cash price is called which term?
• Which type of planning deals with the disposition of assets at or after death?
• Which of the following best describes the current ratio?
• The law of demand states consumers will buy less of an item if:
• Solvency of a business is best indicated by the value of the firm's:
• A loan to purchase seed, fertilizer and chemicals is generally called
• In the break-even example, what is the total cost per acre?
• For valuing homegrown corn used as beef cattle feed, which cost concept is most appropriate?
• When a farmer pays a loan in full, the portion of the payment that represents the amount borrowed is called what?
• The person who rents from someone else is called what?
• Which financial statement is most helpful for assessing a farm's short-term liquidity and debt service ability?
• What is the financial metric that compares current assets to current liabilities?
• Which cost category changes with production volume in the short run?
• What is the average variable cost per bushel for the farmer given fixed costs of $200 per acre, variable costs of $400 per acre, and yield of 200 bushels per acre?
• What financial term describes an item that is owed or currently payable to someone else?
• Which of the following is not depreciable to farmers?
• Accrual income statements allow for?
• Which of the following is not depreciable for farm assets?
• Which statement best describes assets on a balance sheet?
• Book value of an asset is calculated as original cost minus what?
• Working capital is defined as which of the following?
• The portion of land debt due after this year is classified as which?
• If total assets are $550,000 and total net worth (equity) is $200,000, the annual rate of return earned on equity was 25%. What were net earnings for the year?
• What is another name for a financial statement?
• Equity represents?
• The price paid for the right but not the obligation to buy or sell futures contracts is called which term?
• A business expense due to borrowing money is
• What term describes things of value that are owned by a business?
• In the asset scenario, what was the book value immediately before sale?
• At break-even level of production, which two financial measures are equal?
• Which financial document shows owner's equity as of a date?
• An individual seller typically has very little control over the price he/she receives for their product at a given point in this type of market
• Which action is most likely to reduce short-term costs by changing inputs used?
• An enterprise budget is?
• Which decision is most likely to impact total costs for a farm firm?
• With assets of $321,000 and liabilities of $160,000, the debt/equity ratio is approximately which?
• Economics involves the study of how people allocate scarce
• In futures markets, what is the basis?
• A forward contract eliminates what kind of risk for the farmer?
• In the asset scenario, what is the amount of depreciation claimed?