AGEC 3403 Quiz 3

Which of the following is an accounting system that uses revenue/expense matching?

*Accrual Single Entry Cash Double Entry

Which of the following is NOT a use of financial records as discussed in the lecture?

*Eliminate Tax Liability Assist in obtaining loans Assist in the analysis of new investments Measure Profit

Which of the following is NOT one of the four financial statements that we will explore in-depth in this class?

*Statement of Owner's Equity Balance Sheet Cash Flow Budget Income Statement

Farm Business activities can be divided into 3 categories:

-Production -Financing -Investment

The balance sheet is used to analyze______ and _______

-Solvency -Liquidity

Match the following terms to their definition:

Accounts Payable--An expense that has been incurred but not yet paid Accounts Receivable--Revenue for a product that has been sold or a service provided but for which no payment has yet been received Asset--Any item of financial value to the business, whether tangible or intangible. Liability--A debt or other financial obligation that must be paid at some point in the future. Owner's Equity--The difference between business assets and business liabilities; also known as Net Worth. Inventory---Physical quantity and financial value of product produced for sale that have not yet been sold. Revenue--The value of products and services produced by a business during an accounting period. Expense--A cost or expenditure incurred in the production of revenue.

Which of the following is the global standard in accounting, is very accurate, but requires extensive accounting knowledge to use? ( Does not impact tax liability)

Accrual *Double Entry Cash Single Entry

Which of the following financial statements is used to calculate profitability?

Chart of Accounts Cash Flow Statement Balance Sheet *Income Statement

Which of the following is an accounting system that is easy to use and offers increased tax flexibility?

Double Entry Accrual Single Entry *Cash

This type of farm business activity involves the purchase or sale of long term assets, such as a truck or tractor.

Liquidity *Investing Financing Operations

An accounting period should begin/end when:

The expenses or revenues are earned or incurred Always at the end of the calendar year *A business is in a period of little activity A business has most of its operation ongoing