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Name:    You must enter your name to take this test. 1998 District 7 Cooperative Education Test

True/False Indicate whether the sentence or statement is true or false.
T F	1.	An investor owned corporation’s primary purpose is to make profit for the owners
T F	2.	A partnership is a business jointly owned for profit by two or more people.
T F	3.	Every cooperative in Ohio is a member of the Ohio Council of Farmer Cooperatives.
T F	4.	It is lawful in Ohio cooperatives to develop brand names.
T F	5.	Cooperatives are an integral part of the American business system.
T F	6.	A good source of credit for a farmer is the Bank for Cooperatives.
T F	7.	A well-informed membership is not essential to the success of a cooperative.
T F	8.	Only members may deal with farmer cooperatives.
T F	9.	Pooling is a practice commonly used by marketing cooperatives.
T F	10.	Patronage refunds received by patrons are exempt from federal income tax to the recipient.
T F	11.	Agriculture is the only industry in the United States that uses cooperatives to do business.
T F	12.	The financial success of a farmer cooperative depends entirely on the state and federal laws under which it is incorporated.
T F	13.	Cooperatives may be organized with or without capital stock.
T F	14.	Dividends paid by a cooperative on member capital are limited by statute and/or practice.
T F	15.	An individual business has its policies developed by its customers who produce income to the business.
T F	16.	Net savings in a cooperative are distributed to members on basis of years of membership in the cooperative.
T F	17.	Preferred stock investors in cooperatives have no voting privileges.
T F	18.	The only approved form of business in the United States is a cooperative.
T F	19.	Operational planning for a cooperative involves short range day to day planning that is responsibility of the directors True False
Multiple Choice Identify the letter of the choice that best completes the statement or answers the question.
A B C	20.	Determines the credit policy of the cooperative a. Director c. Manager b. Member
A B C	21.	Establishes a fund to finance trips for contest winners to the AIC meeting. a. Director c. Manager b. Member
A B C	22.	Adopts the by-laws of the cooperative a. Director c. Manager b. Member
A B C D	23.	The founder and first president of The National Cooperative Business Association was: a. Murray D. Lincoln c. Jerry Voorhis b. James Peter Warbasse d. William Swank
A B C	24.	Handles complaints of employees. a. Director c. Manager b. Member
A B C	25.	Prepares an annual report of the cooperative’s operations. a. Director c. Manager b. Member
A B C	26.	Employs the manager of the cooperative. a. Director c. Manager b. Member
A B C	27.	Determines which accounts are to be written off to bad debts. a. Director c. Manager b. Member
A B C	28.	Hires the auditor to perform the annual audit. a. director c. manager b. member
A B C	29.	Elects members of cooperative board of directors a. director c. manager b. member
A B C D	30.	The federal government passed a legislative act that defined and recognized the farmers’ need for financing. The act is the: a. Hatch Act c. Farm Credit Act b. Capper Volstead Act d. Land Grant Act
A B C D	31.	Farm cooperatives are distinguished from other forms of private enterprise, in that: a. net savings are divided equally among the members. b. democratic control is by members ad individuals rather than investors holding capital stock. c. returns are based on capital investments by the members. d. there are variable returns on invested capital.
A B C D	32.	The Board of Directors of a farmer cooperative is usually made up of representatives who are: a. appointed by management c. elected by the voting members at annual meetings b. elected by all the patrons d. elected by employees
A B C D	33.	General farm organizations which are not cooperatives but membership organizations devoted to social, educational and legislative work are: a. Farm Bureau Cooperative Association c. Countrymark, Inc. b. Grove City Farmers Exchange d. Ohio State Grange
A B C D	34.	General farm organizations which are not cooperatives, but membership organizations devoted to social, educational, and legislative work are: a. Farm Bureau Cooperative Association c. Countymark,Inc. b. Grove City Farmers Exchange d. Ohio State Grange
A B C D	35.	The president of a selective is usually selected by its: a. members c. management staff b. executive committee d. Board of Directors
A B C D	36.	A farmer cooperative is owned by: a. outside investors c. members-patrons b. farmers cooperative service d. Ohio Department of Agriculture
A B C D	37.	The voting rights in a cooperative are usually based on each member having: a. a number of votes in proportion to the size of his farm business b. one vote for each share of stock owned c. one vote per member d. the number of votes in proportion to his length of membership in the cooperative
A B C D	38.	A cooperative’s net profits should go to: a. patrons on the basis of shares of stock owned b. patrons at a rate prescribed at the beginning of each year c. patrons on the basis of dollars of business done with co-ops d. management employees as a bonus as determined by the members
A B C D	39.	The single most important purpose of a farmer cooperative is: a. promoting new farm legislation b. promoting modern agricultural products c. strengthening the individual members farm business d. aiding agricultural organizations
A B C D	40.	Cooperative principles are the guideposts that distinguish cooperatives from non-cooperative businesses, which one of the following statements is NOT a basic cooperative principle? a. open membership c. unlimited interest on equity capitol b. democratic control d. patronage refunds (operation at cost)
Matching
		Choose either ‘a’ or ‘b’ as the correct answer. a. This IS considered a basic cooperative principle or characteristic. b. This IS NOT considered a basic cooperative principle or characteristic.
A B	41.	Profits are distributed in proportion to amount of stock owned.
A B	42.	Vote for directors at annual stockholders meeting.
A B	43.	Profit distributed in proportion to amount of patronage.
A B	44.	Democratic control.
A B	45.	Majority of business is done with members.
A B	46.	The purpose is to obtain a service for the benefit of its members.
		Choose either ‘a’ or ‘b’ as the correct answer. a. Members of a cooperative ARE responsible for this action. b. Members of a cooperative ARE NOT responsible for this action.
A B	47.	Organize the cooperative at the outset.
A B	48.	Doing business with the cooperative.
A B	49.	Make capital investment if necessary.
A B	50.	Accept special assignments or responsibilities on a committee.
A B	51.	Seek information on operations and affairs.
A B	52.	Expect special privileges from the cooperatives.
A B	53.	Attend all general and annual meetings.
A B	54.	Approve the budget for the coming year.
		Choose either ‘a’ or ‘b’ as the correct answer. a. Directors of cooperatives ARE responsible for this action. b. Directors of cooperatives ARE NOT responsible for this action.
A B	55.	Establish credit policy.
A B	56.	Employ operating personnel.
A B	57.	Run the business.
A B	58.	Approve the general plan of operation.
A B	59.	Conduct staff training.
A B	60.	Handle employee complaints.
A B	61.	Decide whether it is possible to pay patronage refund and what percentage of the refund is to be paid in cash.
A B	62.	Decide to merge with other business firms.
A B	63.	Engage auditor.
A B	64.	Borrow money for the association.
A B	65.	Run day-to-day cooperative business operations.