2022 FFA Farm and Agribusiness Management CDE Test

A neighbor sues because trees were killed by herbicide drift. This is an example of

legal risk

What is the Tax Report a farmer must fill out to report farm Income and Expenses?

Schedule F

A line-of-credit loan to purchase fertilizer is:

operating loan

Which type of budget can be used to project how many bushels of corn a farmer will have to sell:

Enterprise

The money used to ensure performance of a grain futures contract is called:

Margin

The following is NOT an example of an opportunity cost:

Death loss in a cattle operation

The USDA categorizes farm risk into these 5 groupings:

Market, production, financial, legal, human

What is the standard weight a bushel of soybeans is sold?

60 lbs

Interest that has accumulated on a loan but not yet been paid is called:

Accrued Interest

How many pounds are in a feeder cattle contract?

60,000#

Which of the following do not have management responsibilities?

Limited partners

The USDA farm assistance program to aid eligible livestock producers who lost excess livestock in April's blizzard:

Livestock Indemnity Program

Which of the following items will give you the best indication of the actual production in a beef cow herd?

Pounds weaned per exposed female.

Which situation describes a positive basis?

cash price is higher than corresponding futures price

Which of the following is considered a solvency measure?

Debt to Assest Ratio

Cash Flow budgets are best described as:

A budget analysis of cash movement for a period-of-time

A farmer should keep good financial and production records to:

All of the above (make sound business decisions, be able to prepare an income tax return, apply for operating and chattel loans)

Market Livestock held for sale is considered:

A current asset

Which of the following is not a characteristic of a perfectly competitive firm?

The firm is one of few producing the goods it sells.

The cost of seed is:

A direct expense

The term used to identify the difference between the cash price and the futures price for the time, place and quality where delivery actually occurs is:

Basis

Which of the following is not one of the steps of the risk management process?

Budget

Refinancing a portion of an operating loan as a longer-term debt would improve the Liquidity of the business:

True

APH stands for:

Actual Production History

Due to Russia blockading ports on the Black Sea, producers will see an increase in price for which of the following inputs in 2022?

Fertilizer

Crop insurance premiums are subsidized by the federal government through the Risk Management Agency (RMA).

True

Obligations on the balance sheet that are payable within the next year are:

Current Liabilities

A cattle rancher sells calves every year during the second week of February at a weight of 800 pounds per head. In October, experts expect feeder cattle prices to drop all winter. To lock-in a price for the calves, the rancher could:

Any of the above (buy puts, purchase a Livestock Risk Protection (LPR) policy, sell a feeder cattle futures contract)

The type of investment analysis that estimates the length of time it takes for an investment to pay for itself is:

Payback Period

Livestock, stored grain, land, and personal property used to secure a loan are:

Collateral

Which of the following would likely be considered the most desire debt-to-asset ratio?

41%

Which of the following is not found on the balance sheet?

Crop sales

The type of business organization that pays no taxes is:

Partnership

An advantage of this type of business organization is that there are no organizational costs:

Sole Proprietorship

The price of land depends on:

All of the above (it's productivity, the price it's production commands, the demand for it)

A benefit to leasing equipment under an operating lease arrangement is that:

The annual lease payment is tax deductible

Which ratio tells whether your business produced enough income to cover all intermediate and long-term debt payments?

Term-debt coverage ratio

Total interest to be paid over the life of an amortized loan equals:

The number of payments times the size of payments minus the amount borrowed

When an increase in the level of production of one enterprise causes a reduction in the level of production of another enterprise, these two enterprises are said to be:

competitive

Which of the following ratios would be the best indicator of farm profitability?

Rate of return on farm assets

A loan taken out for a piece of machinery to be paid back over five years is a(n):

Intermediate Liability

How is Net Farm Income calculated:

Gross income - total cash farm expenses - depreciation +/- inventory changes

Which of the following is considered a capital purchase?

All the above (used tractor, pickup, yearling bull)

Which type of transaction appears in both the income Statement and the Cash Flow Statement?

Cash income and expenses.