2022 Nationals Quiz
Which is a current asset? A. 1000 tons of haylage. B. a hay baler. C. a hay storage shed. D. 100 acres of land for growing haylage
A) 1000 tons of haylage
There are approximately _______ acres in a township. A. 23,040 B. 22,050 C. 19,580 D. 64,00087
A) 23,040....(640 acres in a section x 36)
Which of the following is an example of legal risk? A. A change in tariff rates and food export regulations B. A change in consumers' tastes and preferences C. A change in interest rates D. A and C E. A, B, and C
A) A change in tariff rates and food export regulations.
Which of the following statements about agricultural cooperatives is TRUE? A. A cooperative is owned and operated by member-owners who are also customers. B. A primary objective of a cooperative is to generate the highest possible returns to member-owners. C. A and B D. Neither A or B
A) A cooperative is owned and operated by member-owners who are also customers.
For which of the following risks is risk control the most appropriate treatment method? A A high frequency and low severity risk B. A low frequency and high severity risk C. A high frequency and high severity risk D. A low frequency and low severity risk
A) A high frequency and low severity risk.
Of the types of business organizations listed below, which type of organization allows for the easiest transfer of ownership? A. C-Corporation B. S-Corporation C. LLC D. General Partnership
A) C-Corp
A whole farm cash flow projection is a form of budgeting that can be used to A. determine operating credit needs. B. determine year-end asset values. C. determine living expenses. D. calculate total farm equity
A) Determining operating credit needs.
A producer who suspects that corn markets will be bullish in the coming year thinks corn prices will A. increase. B. decrease. C. exceed a 3-year average. D. A and C
A) Increase
All other factors held equal, small carryover stocks would tend to have what effect on a commodity's price? A. Increase price B. Decrease price C. Increase storage costs D. B and C
A) Increase price
Assume the Bradleys build their sheep budget with a five-year projection. From that analysis, they determine the IRR is 5.6%. IRR stands for A. Internal Rate of Return. B. Internal Revenue Review. C. Issued Revenue Rate. D. Initial Rate of Revenue.
A) Internal Rate of Return
The Bradleys are considering two loan repayment options. For option 1 they would make only annual interest payments with the principal being paid at the maturity of the loan. For option 2 they would pay interest and principal payments annually. If no additional principal payments are made, which loan would have the largest cumulative interest paid over the life of the loan? A. Option 1 B. Option 2 C. They would be the same
A) Option 1
Which of the following best describes risk transfer? A. Paying another party to assume a portion of a risk B. A methodology to reduce the severity of a risk C. A methodology to reduce the frequency of a risk D. Ceasing an activity to eliminate the possibility of incurring a loss E. Setting aside funds to pay for any losses that may occur
A) Paying another party to assume a portion of a risk. (This is insurance)
Which of the following is NOT one of the requirements for a perfectly competitive market? A. Resources are restricted from moving in and out of production. B. Each firm is small relative to the total market. C. Each firm produces a homogenous (similar) product. D. All market participants share the same knowledge about the market
A) Resources are restricted from moving in and out of production.
Net cash farm income (NCFI) results from subtracting cash expenses from the gross cash farm income. What additionally must be added or subtracted from the (NCFI) to calculate the net farm income? A. Sale of capital items, depreciation, total inventory change B. Depreciation, total inventory change C. Sale of capital items, depreciation, total inventory change, principal payments D. All of the above
A) Sale of capital items, depreciation, total inventory change.
Income from sale of purchased finishing lambs held over from the prior year. A. Schedule F B. Schedule C C. Form 4562 D. Schedule D E. Schedule E
A) Schedule F
A farmer would use the futures market with the objective to A. transfer risk. B. increase risk. C. participate in government farm programs. D. obtain a loan
A) Transfer Risk
A tier refers to the townships running east and west in six-mile increments. A. True B. False
A) True
C-Corporations persist after the death of the owners. A. True B. False
A) True
Marketing cooperatives allow farmers and ranchers to gain market power by combining their resources. A. True B. False
A) True
Residential property in towns and cities is generally described by using the recorded plat system. A. True B. False
A) True
The range refers to columns of townships running north and south (quadrangle). A. True B. False
A) True
When Addie markets Bradley Acres' grain, she is always watching the basis, which is the difference between a local cash price and the nearby futures price. A. True B. False
A) True
In limited partnerships, management duties and liabilities are NOT shared equally among all partners. A. True B. False
A) True (One person could own the land, while one works it and the owner hold all liabilities, and make more profit)
A farm business income statement can show a profit in a year, and yet the business is unprofitable. A. True B. False
A) True...further analyses are needed to calculate profitability. The results are recorded and bench marked and rated using the Farm Financial Scorecard
The satisfaction created by the consumption of goods and services is known as A. utility. B. ceteris paribus. C. economic model. D. opportunity cos
A) Utility
When considering what the future value of an investment will be, one utilizes the concept of A. compounding. B. discounting. C. expanding. D. amortization
A) compounding
Restructuring debt in the balance sheet to reduce periodic principal and interest payments usually occurs when business cash flow falls short of expectations. A common strategy used by the lender and business owner to alleviate cash flow difficulties is to A. convert all, or part of the short-term and/or intermediate liabilities to long- term liabilities to reduce payments. B. convert all, or part, of the intermediate and/or long liabilities to short-term liabilities to reduce payments. C. recapitalize paid debt and make no other changes to reduce payments. D. None of the above
A) convert all, or part of the short-term and/or intermediate liabilities to liabilities to reduce payments.
Principal due in the next 12 months on term debt is classified as A. current liabilities. B. long term liabilities. C. noncurrent liabilities. D. None of the above
A) current liabites
An owner of an LLC is also called a A. member. B. stockholder. C. director. D. trustee.
A) member
A financial management tool showing the projected costs and returns associated with a specific production process is a/an A. enterprise budget. B. long-term budget. C. cash flow projection. D. whole farm budget.
A)enterprise budget
Noting that a business's balance sheet on the first day of the business year has total liabilities of $675,000, total assets of $2,150,000 and a debt-to-asset ratio of 31%, calculate its net worth. A. $1,400,000 B. $1,475,000 C. $2,550,000 D. None of the above
B) 1,475,000 Answer: $2,150,000 - $675,000 = $1,475,000
An insolvent business is best reflected by which of the following debt-to-asset ratios? A. 95% B. 110% C. 0% D. 50%
B) 110%
Amos purchased corn seed in the fall of 2021 and stored it over the winter. If he is able to claim this expense on his taxes, when would that occur? A. 2022 B. 2021 C. Must be depreciated due to time of purchase, not an deductible expense D. Seed purchased in the year before planting is not a deductible farm expense.
B) 2021
The Bradleys also purchased rye seed in the fall of 2021, and Amos planted the seed as the cover crop. If he is able to claim this expense on this taxes, when would that occur? A. 2022 B. 2021 C. Must be depreciated due to time of purchase, not an deductible expense D. Cover crop seed is not a deductible farm expense
B) 2021
Addie has 15,000 bushels of soybeans she'd like to sell in March. How many futures contracts can satisfy this sale? A. 1 B. 3 C. 5 D. None of the above
B) 3 ( one futures contract is 5,000 bushels)
As stated in the resource materials, the Bradleys are nearing retirement. During their farming career, they have grown their farmland holdings significantly. As they are planning to retire, they have found that leaving a family legacy of farming and protecting their farmland for future generations is very important for them. Which of the following types of business organizations would best suit the Bradleys' goal of leaving their farm for future generations of their family? A. A partnership B. A trust C. A sole-proprietorship D. None of these are appropriate
B) A trust
Amos sees the cash price decreasing relative to the futures price and calls to tell Addie that the basis is what? A. a strengthening basis. B. a weakening basis. C. an under basis. D. a basis risk
B) A weakening basis.
Which of the following is an example of financial risk that applies to the Bradleys' operation? A. A change in corn prices B. A change in interest rates C. A change in lamb demand D. A and C E. A, B, and C
B) Change in interest rates (Financial Risk)
________ an entry or multiple entries on the balance sheet. It is an obligation for which settlement will occur at a later period. An example is taxes due at a later time, especially if there is a premature sunsetting of a business. A. Total intermediate liabilities are B. Deferred liability is C. Contributed capital is D. Taxable dividends are
B) Deferred liability.
Which of the following would be considered a fixed cost? A. Hired seasonal labor B. Depreciation on machinery C. Crop production inputs D. Feed purchases
B) Depreciation on machinery
According to the IRS code, owners of a C-Corporation must be US citizens. A. True B. False
B) False
Some properties in the U.S., especially in the original 13 colonies, do NOT have a form of legal land description. A. True B. False
B) False
The allowed time for the term of a machinery loan is set by the asset class. A. True B. False
B) False
McDonald's offers a handful of seasonal products, such as the McRib sandwich. If they were to offer seasonal products year-round, customers might lose interest in the seasonal products. What economic principle is McDonald's leveraging? A. Law of increasing marginal utility B. Law of diminishing marginal utility C. Law of increasing marginal cost D. Law of diminishing marginal cos
B) Law of diminishing marginal utility
Pete from Pete's Produce farm stand notices that when he raised prices on his value-added products, quantity sold decreased but not by as much as he expected. Pete noticed that unit for unit, the change in price was greater than the change in quantity demanded. Pete concludes that his value-added products are A. more elastic. B. more inelastic. C. unitary elastic. D. None of the above
B) More inelastic
Net farm income for a business represents a return to A. paid family and paid operator labor. B. owners' investment in the business. C. internal revenue service. D. None of the above
B) Owners' investment in the business
If a person dies without a last will and testament, the disbursement of his or her assets will be guided by A. county ordinances. B. state laws. C. federal laws. D. international laws regarding disbursement of assets
B) The state
Scenario: A business currently needs $205,000 of net farm income (NFI). Assume it maintains careful discipline in all aspects of managing the business and experiences a good year with an NFI of $300,000. If there are no changes in deferred liabilities and market evaluation values from the previous year, what is the effect upon its net worth at the end of the year? A. It will stay the same due to inflation B. It would increase by $95,000 C. It would decrease by $100,000 D. None of the above are realistic
B) increase by the difference
Much of the United States land is measured using two lines at right angles to each other. These are called A. base lines. B. principal meridians. C. tiers. D. range lines.
B) principal meridians
Township and Range Lines crossing each other form squares which are called A. meridians. B. townships. C. sections. D. land parcels
B) townships
A working mother orders organic chicken nuggets, a bag salad mix and a gallon of milk with a grocery delivery service for dinner just before leaving the office at night. She is especially grateful for this convenience. In economic terms, she draws utility in which ways with this service? A. Form, price, value B. Form, place, time C. Place, price, value D. Time, place, price
B)Form, place, TIME
In a partial budget, the calculation to determine net change would be A. (additional revenue + reduced returns) - (additional costs + reduced costs). B. additional revenue + reduced costs. C. (additional revenue + reduced costs) - (additional costs + reduced returns). D. additional revenue - additional costs.
C) (Additional revenue + Reduced costs) - ( Additional costs + reduced returns).
How many sections are usually in a township? A. 12 B. 24 C. 36 D. 48
C) 36 sections in a town ship (6x6 sections)
Fence maintenance is crucial to a livestock operation. However, even with the utmost diligence, animal escapes can happen. Which of the following types of insurance would protect the Bradleys from the risk of lawsuits arising from a claim or damages caused by an escaped animal? A. A Life Insurance Policy B. An Umbrella Property Insurance Policy C. A Commercial Liability Insurance Policy D. A Commercial Property Insurance Policy
C) A Commercial Liability Insurance Policy
If a fence were to be blown down by a derecho (high speed straight line wind), which of the following types of insurance would compensate the Bradleys for damages to their fence? A. A Life Insurance Policy B. A Umbrella Liability Insurance Policy C. A Commercial Property Insurance Policy D. A Commercial Liability Insurance Policy
C) A Commercial Property Insurance Policy
A tariff assessed on French cheeses by the US government likely results in which of the following effects? A. A decrease in the quantity of French cheeses supplied to US consumers B. An increase in the quantity of US or non-French cheeses demanded by US consumers C. A & B D. Neither A or B
C) A decrease in the quantity of French cheeses supplied to US consumers, and an increase in the quantity of US or non-French cheeses demand by US consumers.
A producer buys 2,500 units of a product for $5.00 per unit in Market A. She simultaneously turns around and sells all 2,500 units for $7.00 per unit in Market B. A producer's ability to profit from price discrepancies in different markets is called A. marginal value. B. margin. C. arbitrage. D. None of the above
C) Arbitrage
A balance sheet that includes the adjusted basis of the non-current assets is a A. market basis balance sheet. B. an asset balance sheet. C. cost basis balance sheet. D. All of the above are correct.
C) Cost basis balance sheet.
A futures contract is a mechanism for A. coordinating physical commodity delivery at a later date. B. narrowing the local basis at a given commodity date. C. facilitating price discovery at a later date. D. All of the above
C) Facilitating price discovery at a later date.
f Anthony increases his sheep herd, which of the following variable costs would be most affected? A. Labor B. Machinery C. Feed D. Farm insurance
C) Feed
Deductions detailed for depreciation and amortization. A. Schedule F B. Schedule C C. Form 4562 D. Schedule D E. Schedule B
C) Form 4562
A farmer uses revenue protection insurance to protect a corn crop. This type of insurance would protect against which of the following? A. Low prices B. Low yields C. Low yields and low prices D. Failure of grain buyer to make a payment upon delivery
C) Low Yields and low prices.
Crop insurance helps farmers in instances of ________. A. Low yields B. Low prices C. A & B D. Neither A or B
C) Low yields, and low prices.
Addie wants to hedge the price of soybeans sold in the fall. What actions should she take in May? A. Buy futures contracts expecting to buy more contracts when the soybeans are sold. B. Buy futures contracts expecting to sell those contracts when the soybeans are sold. C. Sell futures contracts expecting to buy them back when the soybeans are sold. D. Sell futures contracts expecting to sell more contracts when the soybeans are sold.
C) Sell futures contracts expecting to buy them back when the soybeans are sold.
The most commonly used type of business organization for US farms and ranches is the A. corporation. B. partnership. C. sole-proprietorship. D. LLC.
C) Sole-proprietorship
Change in net worth in an accounting period is best illustrated in the A. balance sheet. B. statement of cash flows. C. statement of owner equity. D. income statement.
C) Statement of owner equity.
The micro-macro paradox suggests commodity producers, such as those growing row crops, should stay focused on which 2 practices? A. Value-added production, paying down debt B. Paying down debt, prioritizing production efficiency C. Tracking forces behind market price changes, prioritizing operational efficiency D. Paying down debt, tracking forces behind market price changes
C) Tracking forces behing market price changes, prioritizing optional efficiency.
Which of the following statements about trusts is false? A. A trust is a legal arrangement by which a person (settlor) transfers ownership of specific assets to another person or group to manage the property. B. Trustors are the people who manage a trust. C. A trust can be used to manage estate taxes. D. All of the above are true
C) Trustors are the people who manage a trust
The primary purpose of a balance sheet is to illustrate the A. value of assets, liabilities, and net farm income. B. value of profit, net farm income, and liabilities. C. value of net worth, liabilities, and assets. D. key measures of a farm financial scorecard.
C) Value of Net worth, liabilities, and assets.
To measure using metes and bounds it is necessary to start with A. a principal meridian. B. a base line. C. a known landmark. D. an intersection of a principal meridian and a base line
C) a known landmark
A member of a corporation's board of directors is also called A. a director. B. a stockholder. C. an officer. D. a trusto
C) an officer.
Recent farm subsidy programs have attempted to A. offset market price risk for producers. B. maintain a relatively affordable and plentiful food supply for consumers. C. prop up US food prices abroad. D. A and B E. All of the above
D) A and B
___________ is an example of risk control. A. An insurance policy B. A fire suppression system C. Following label directions when applying pesticides D. B and C E. None of the above
D) A fire suppression system and Following label directions when applying pesticides, B and C.
Thomas Jefferson authorized a system of land measurements to define locations of properties in the western territory for the following main reasons. A. So that private ownership of property could be easily defined. B. So that property could be exchanged to another owner more easily. C. A checkerboard system could create more reliable delineations. D. All of the above E. None of the above
D) All above
Which of the following would be a part of an integrated plan to manage the human safety risks associated with a farming operation? A. Ensure that employees wear appropriate personal protective gear to prevent injuries. B. Ensure that safe pesticide mixing and handling procedures are followed. C. Have the appropriate insurance policies in place to pay for damages associated with work-related injuries. D. All of the these are part of an integrated plan to manage human safety risks
D) All of these are part of an integrated plan to manage human safety risks.
To conduct a thorough investment analysis, one should consider A. income taxes. B. inflation. C. risk. D. All the above
D) All the above
Which of the following is NOT a type of cooperative? A. Marketing B. Credit C. Processing D. All of the above
D) All the above
Which of the following is NOT one of the steps in the risk management process? A. Identify B. Plan C. Prioritize D. All of these are steps in the risk management process
D) All the above
Which of the following is a benefit of a corporate business structure? A. Ownership is easily divided into shares. B. A corporation does not dissolve with the death of an owner. C. It benefits estate planning. D. All of the above
D) All the above
Which of the following is an example of market risk that applies to the Bradleys' sheep operation? A. A change in tastes and preferences for leather goods B. A change in lamb consumption C. A switch from wool to polyester as a primary fabric material D. All of these are examples of market risk
D) All the above
Which of the following statements is a best practice when selecting a business organization structure? A. Business owners should select the simplest business organization that still meets their needs and goals. B. Partnership agreements should always be written and reviewed by legal and tax professionals before they are signed. C. Future plans and aspirations of the business owner should be taken into account when deciding the optimal business structure. D. All of the above
D) All the above
Federal marketing orders are intended to promote agricultural products by collectively influencing A. product demand. B. product supply. C. product price. D. Any of the above
D) Any of the above.
A cattle feeder wishes to hedge against future corn price increases. Which of these actions would accomplish that goal? A. Buy a corn put option B. Sell a corn call option C. Sell a corn futures contract D. Buy a corn futures contract
D) Buy a corn futures contract
For his feasibility study exploring an increase in herd size, Anthony wants to calculate the expected marginal revenue by adding ewes. What formula will he use? A. Change in net profit divided by change in total revenue B. Net profit divided by total expenses C. Total revenue divided by quantity sold D. Change in total revenue divided by change in quantity sold
D) Change in total revenue divided by change in quantity sold. (This is Marginal Revenue formula)
Using best practices for humane animal handling mitigates __________ risk arising from injuries to workers from startled livestock, and __________ risk associated with the loss of market animals. A. human, market B. financial, production C. market, human D. human, production
D) Human, production
If Anthony got a machinery loan to take over the operation of the farm, how would this loan and the purchase of the equipment impact his balance sheet? A. It will not affect it. B. It will only increase his current liabilities. C. It will only increase his intermediate liabilities. D. It will increase both his current and intermediate liabilities
D) Increase his current and intermediate liabilities.
A decrease in the U.S. exchange rate causes domestic goods to become A. less expensive for U.S. consumers. B. more expensive for U.S. consumers. C. more expensive for consumers abroad. D. less expensive for consumers abroad.
D) Less expensive for foreign consumers
The additional cost associated with producing one additional unit of output is known as A. incremental cost. B. average cost. C. supplemental cost. D. marginal cost.
D) Marginal cost.
Addie can hedge new crop soybeans beginning in which contract month? A. March B. June C. August D. November
D) November
the yield protection in revenue protection insurance is based on A. their farm's actual production history of yields. B. their county's actual production history of yields. C. their state's actual production history of yields. D. whatever yield the Bradleys want to buy
D) Their farms actual production history of yields.
When evaluating an investment, it is important to consider the impact of time. This general concept is referred to as A. future value. B. nominal value. C. net present value. D. time value of money
D) Time Value of Money
If the farm business increases the number of crop acres, which of the following costs are least likely to change? A. Average fixed costs per acre B. Total variable costs C. Average total costs per acre D. Average variable costs per acre
D) Variable costs per acre
A legal land description is read by A. reading it from the smallest to the largest parcel. B. locating the section in the township. C. finding the location in the quarter. D. All of the above
D) all the above
A hedge-to-arrive contract has 3 components, two of which are known at the time the contract is purchased. The known components include _______ and ______. The third component is unknown until a later date. That component is the ______. A. delivery month, futures price, premium B. futures price, basis, and delivery month C. margin, basis, delivery month D. futures price, delivery month, basis
D) futures price, delivery month, basis.
The primary purpose of income tax management is to A. minimize the tax obligation. B. have zero taxes due. C. defer income taxes to the future. D. maximize after-tax income
D) maximize after tax income.
The present system of Governmental Land Surveys was adopted in 1785. This system is called the A. township divisions system. B. section subdivision system. C. fractional section system. D. rectangular system
D) rectangular system
The "Invisible Hand" in economics means A. the rich will get richer, and the poor will get poorer. B. people will steal when necessary. C. government intervention is needed in markets. D. markets find equilibrium without intervention.
D) the market will find equilibrium without intervention
Excessive rainfall is an example of __________ risk. A. market B. legal C. financial D. human E. production
E) Production
Anthony has $5,000. Instead of investing these funds at a 4.5% interest at the bank in his town, he chose to invest this money into his livestock SAE. The 4.5% interest he did not receive is a/an
Opportunity Cost
The ________ in the Bradleys' 2021 Financial Analysis summarizes the sources, uses and balances of available cash. (What summarizes the sources, uses and balances of available cash). A. balance sheet B. statement of cash flows C. statement of owner equity D. income statement
Statement of cash flows.
