National FFA FBM

the formula used to calculate break-even prices to cover total operating costs is:

(price times yield) minus total operating costs=0

What are the 5 stages in a complete "production marketing system"?

1. Producing 2. Processing 3. Wholesaling 4. Retailing 5. Consuming

For self employed individuals, what % of their health insurance premium is deductable?

100%

Compounding is the process of determining which of the following? A. Future value of a current sum of money B. Present value of a future sum of money C. Annual loan payment amount

A

If jack & jill is wanted to maximize profits they should: A. Produce where marginal revenue is equal to marginal cost B. Produce where total revenue is greater than total cost C. Produce where costs are minimized D. Produce at maximum production point

A

current assets are those items that will be A. used during the next accounting period B. sold during the next accounting period C. paid in the next accounting period D. A and B E. A and C

A and B

in the cash method of accounting, A. revenue and expenses are based on actual cash transactions B. revenue is reported in the year that cash is received C. inventory changes influence revenues and expenses D. A and B

A and B

when deciding on the level of record keeping for a business, managers need to consider: A. the amount of info desired from the records B. the amount of time they can devote to record keeping C. their record keeping abilities D. A, B, and C E. A and B

A, b, and c

Supplies are paid for during an accounting period, but at the end of the accounting period the supply inventory is larger. This indicates which of the following? A. cash expenses overstate actual expenses for the accounting period B. Cash expenses understate actual expenses for the accounting period C. Cash expenses are in accurate measure of supply expenses for the accounting period D. Cash receipts are in accurate measure of supply expenses for the accounting period

A.

What is the internal rate of return?

An investment analysis method that determines the rate of return that equates the present value of cash inflows to the present value of cash outflows

A balance sheet will list which of the following items:

Assets & liability

Diversification in the production of crops and /or livestock generally tends to: A. Increased returns and decreased risks B. Decreased returns and decreased risks C. Increased returns and increased risks D. Decreased returns and increased risks

B

Which of the following items would be a farm business expense for an accounting period? A. Cash used to purchase new machinery B. Cash used to purchase livestock feed C. Cash received for the sale of life stock D. Cash use to purchase groceries

B

For a set of data which of the items below is a statistical measure of variation? A. Correlation B. Variance C. Mean D. Median

B variance

Inventory changes and changes in the value of prepaid expenses would be used to calculate which of the following? A. Net cash income from operations B. Accrual adjusted net farm income from operations C. gross cash income D. Depreciation

B. Accrual adjusted net farm income from operations

The difference between futures price and local price is

Basis

A trader who expects the market drop in price considers it to be a _________ market.

Bead

The willingness to buy a commodity at a specific price is the ________

Bid

When the market goes up day after day, traders say we are in a __________ market

Bull

If George wanted to explore whether he should add a crop enterprise to the dairy farm, he should complete a A. While farm budget B. Enterprise budget C. Partial budget D. Family living budget

C

Monopolistic competition markets and monopoly markets are both characterized by: A. Homogenous producers B. High barriers to entry C. Price searchers D. Many sellers

C

Principle payments of debt would be included directly on which financial statements? A. Balance sheet B. Accrual income statement C. Statement of cash flows D. None of the above

C

an enterprise budget: A. is the tool used in analyzing only changes in the business operations B. is a physical and financial plan for the entire farm business for a specific period of time C. shows the expected returns and costs associated with a specific production activity D. is a record of past performance

C

The Net Worth statement or balance sheet shows the financial condition of a business A. for the accounting period B. for a calendar year C. at a particular point in time D. at a period of time defined by the creator of the financial statement

C. at a particular point in time

which of the following isn't one of the basic financial statements? A. balance sheet B. income statement C. monthly bank statement D. statement of owner equity

C. monthly statement

expenses that would be accounted for on an income statement include all of the following except A. fertilizer B. fruit purchases C. principal payments D. part-time hired labor

C. principal payments

A farm business accounting period for January 1, 2011 to December 31, 2011 would be an example of what type of accounting period?

Calendar year accounting period

If a producer wants to take advantage of a rising market, he would purchase a _______ option

Call

The accounting method used by most farmers for income tax is

Cash

The 1040 schedule F is an example of which type of income statement?

Cash income statement

The Income tax was first used to pay for the ______ ______

Civil war

The prices of winter wheat, dried beans, and corn silage tend to move together in the same direction. What is the statistical term for this?

Correlation

If hamburgers & hot dogs are substitute goods, an increase in the price of hamburgers will cause: A. Demand for hot dogs to increase and equilibrium price to decrease B. Demand for hot dogs to decrease and equilibrium price to increase C. Demand for hot dogs to decrease and equilibrium price to increase D. Demand for hot dogs to increase and equilibrium price to increase

D

Which of the following could reduce production risk A. Genetically modified crops B. Crop insurance C. Crop diversification D. All of the above

D

Which of the following is NOT an advantage of a sole proprietorship? A. Farmer directly receives all rewards of good management and labor B. Easily formed C. Few gov regulations and restrictions D. Owner has limited liability for the business

D

Which of the following is a disadvantage of a corporation? A. Owners have unlimited liability B. No regulations for start up C. Double taxation D. A & c

D

Which of the following is a way to manage human risk; A. Create employee handbook B. Properly train employees C. Clearly establish roles of each member of the farm operation D. All of the above

D

Which of the following would b included on an accrual income statement but not on a cash income statement? A. Fertilizer expenses B. Cash paid interest on operating loans C. Receipts for livestock sales D. Depreciation on machinery

D

Which of the following would not be a way to increase farm income in a low income year? A. Collect all accounts receivable B. Use slower depreciation C. Close out positive futures accounts D. Use the grain for an FSA non-recourse loan

D

Which type of cost changes with the level of production? A. Variable costs B. Average variable costs C. Total cost production D. All of the above

D

On the production function graph the MC=MR, what does this tell the producer? A. where the losses will be the least B. where change in cost and change in revenue are the same C. where the profits are the greatest D. all of the above

D all of the above

Which of the following can help explain the difference between net cash income and net farm income from operations? A. The change in feed inventory reduced revenue B. Depreciation increased expenses C. The sale of capital items increased revenue D. Change in inventory value of capital assets

D.

What law is it when the consumer will purchase more only at lower prices?

Demand

The buyer of a put option will make money if the futures price _________

Falls

For self-employed persons, the deduction for employee-equivalent portion of the self-employment tax is deducted on :

Form 1040

The buying or selling of futures contracts as substitutes for later cash transactions to ensure against price changing is ____________

Hedging

Economic device where by an individual or firm substitutes a certain cost for an uncertain financial loss

Insurance

The payment to an insurance company by a policyholder to purchase and maintain an insurance policy

Insurance premium

The cost to carry past the point of harvest should cover ______ & _______ costs

Interest & storage

The time value of money is the concept of computing the value of money, either in the present or future, based on a given:

Interest rate & length of time

The maximum permitted price increase or decrease from the previous day's closing price is the ________ price move

Limit

The amount of money that must that must be deposited when a product holds a futures position is

Margin

Current farm assets are typically valued at

Market value

Good income tax management is to

Maximize after-tax income

In a set of data, what refers to the number that occurs most frequently?

Mode

Which of the following is not one of the basic financial statements? A. Balance sheet B. Income statement C. Monthly bank statement D. Statement of owner equity

Monthly bank statement

The futures contract month closest to maturity is __________ delivery month

Nearby

An agriculture producer learns what from the production function?

Output response to an input

What are the 3 parts of total utility?

Place, form & time

A quick advance in prices is a

Rally

Unexpected circumstances where the probability of an event occurring can be empirically determined

Risk

The act of managing or controlling exposure to risk in order to meet present objectives or risk exposure guidelines

Risk management

Products have "utility to consumers if they meet a need and in the process provide _________________"

Satisfaction

The tax form used to list farm income & expense items is

Schedule F

Traditionally, basis should cover the ____________, ___________, & ____________ costs

Storage, interest, & transportation

The price at which options are purchased or sold at is _________ price

Strike

What does marginal cost measure?

The change in total cost from adding another unit of input

What are the two economic principles that make up the production function

The law of diminishing returns and the law of diminishing physical output

Production function shows

The relationship between inputs and outputs

A market characterized by a few potential traders & few or infrequent trades is a __________ market

Thin

Where the probability of an event occurring cannot be empirically determined

Uncertainty

It's important to recognize that the farmer is vulnerable to price variability brought on by (6)

Weather, demand, surplus, imports, yields

to reduce supply often times the market price a. is below cost of production b. has no relationship c. has excessive margin d. none of the above

a

a person who has strong feelings that the market is headed higher is considered _______________

a bull

the changes in the value of wine inventory would be included on which type of income statement?

accrual adjusted income statement

a balance sheet contains what items?

assets and liabilities

supplies are purchased and paid or during an accounting period, but at the end of the accounting period, the value of the supply inventory is larger than at the beginning of the accounting period. this indicates what?

cash expenses overstate actual expenses for the accounting period

the 1040 schedule F is an example of which type of income statement?

cash income statement

cash on hand

current asset

unused bottles

current asset

accrued interest

current liability

principal payments due next year

current liability

a tool used to analyze changes in the business operations is: A. income statement B. profit & loss statament C. partial budget D. all of these

d

any time a consumer will take more only at lower prices is called

demand

the dynamic process of searching for the equilibrium or market- clearing price is called

discovery

interest paid in 2012

expense

payments for purchased fruit

expense

the financial statement that measures the profit of business is the

income statement

developing an accrual adjusted income statement requires

inventory records, cash revenue, cash expenses & depreciation records

value of fermentation tanks

noncurrent asset

outstanding balance of a five year loan

noncurrent liability

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

The chart of accounts is a set of _______________

records that provide the info to construct financial statement

increase in the value of wine inventory

revenue

wine sales

revenue

which method of accounting is considered the easiest?

single entry accounting

what is Stage II on the production function? A. lowest point B. highest point C. point of diminishing returns D. decision making stage

the decision making stage