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True/False
Indicate whether the sentence or statement is true or false. |
| | 1. | Every state has laws authorizing the formation of cooperative corporations. |
| | 2. | A member patron is defined as any person marketing, purchasing, or obtaining a service through a cooperative. |
| | 3. | The most important resource to be managed in a cooperative is its facilities. |
| | 4. | Cooperatives are unique in that their member-owners are also their patrons. |
| | 5. | In a partnership, a general partner’s liability extends to personal assets. |
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Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question. |
| | 6. | A cooperative is owned by its: | a. | Members | b. | Investors | c. | Lenders | | | | | | | | |
| | 7. | A cooperative is usually controlled on the basis of: | a. | Amount of stock held by investors | c. | Notes held by lender | | b. | One vote per member | | | | | | | | |
| | 8. | A cooperative distributes benefits based on: | a. | Years of membership | | b. | Amount of investment in the cooperative | | c. | Use of cooperative’s services | | | | |
| | 9. | Cooperatives operate to maximize: | a. | Profits to be retained by the cooperative | | b. | Return of investments in the cooperative | | c. | Profits for member/patrons | | | | |
| | 10. | Farmer marketing, supply, and service cooperatives in the United States total about: | a. | 5,000 | b. | 2 million | c. | 50,000 | | | | | | | | |
| | 11. | About what percent of major farm inputs do farmers buy from their cooperatives? |
| | 12. | Memberships in farmer marketing, supply, and service cooperatives in the United States total about? | a. | 1 million | b. | 2 million | c. | 4 million | | | | | | | | |
| | 13. | About what percent of their products do farmers market through their cooperative? |
| | 14. | Most borrowed capital for agricultural cooperatives comes from: | a. | Banks for cooperatives | c. | Commodity Credit Corporation | | b. | Commercial Banks | | | | | | | | |
| | 15. | The farmer-owned cooperative Farm Credit System provides what proportion of total agricultural credit? | a. | One-third | b. | One-half | c. | Two-thirds | | | | | | | | |
| | 16. | Which of the following is not a federal agency? | a. | Farm Credit Administration | c. | Rural Telephone Bank | | b. | Rural Electrification Administration | d. | National Cooperative Bank | | | | | | |
| | 17. | Which of the following is not a general farm organization? | a. | American Farm Bureau Federation | c. | National Farmers Union | | b. | Cooperative Extension Service | d. | National Grange | | | | | | |
| | 18. | The Agricultural Service is a ________________________. | a. | General Farm Organization | c. | Foundation | | b. | Federal Agency | d. | Volunteer society | | | | | | |
| | 19. | Who owns the business in an Agricultural Cooperative? | a. | The individual | c. | The stockholders | | b. | The partners | d. | The member-patrons | | | | | | |
| | 20. | Which of the following is not a required set of papers for organizing a cooperative? | a. | Articles of incorporation | c. | Credit verification | | b. | Bylaws | | | | | | | | |
| | 21. | A _______________ cooperative is one which serves member, local, and regional cooperatives. | a. | Centralized | b. | Federated | c. | Mixed | d. | Nationalized | | | | | | | | | | |
| | 22. | Cooperatives in the United States are: | a. | Socialistic | c. | Government organizations | | b. | Private enterprise | | | | | | | | |
| | 23. | The board of directors in a cooperative are: | a. | Elected by the membership | c. | Chosen by the government | | b. | Appointed by the manager | | | | | | | | |
| | 24. | Requirements to vote in a cooperative are: | a. | Owning common stock | | b. | Meeting membership qualifications | | c. | Transacting more than 50% of your business with it | | | | |
| | 25. | Who sets policy in a cooperative? | a. | The board of directors elected by the membership | | b. | The manager hired by the board of directors | | c. | Provisions of the incorporating statute | | | | |
| | 26. | The manager of a cooperative: | a. | Usually owns the most stock | c. | Appoints the board of directors | | b. | Is hired by the board of directors | | | | | | | | |
| | 27. | Almost all U.S. cooperatives are incorporated under: | a. | State incorporation statues | c. | The Capper-Volstead Act | | b. | Federal incorporation statues | | | | | | | | |
| | 28. | The cooperative principle is defined as a: | a. | Wise or expedient rule of conduct or management | | b. | Governing law of conduct, a general of fundamental truth | | c. | Usual method, customary habit, action, or convention | | | | |
| | 29. | With respect to cooperatives, a usual method, customary habit, action, or convention is called a: | a. | Policy | b. | Practice | c. | Principle | | | | | | | | |
| | 30. | Cooperative Principles: | a. | Have evolved over time in terms of definition and acceptance | | b. | Are accepted universally by all cooperatives | | c. | Dictated by Federal Statue | | | | |
| | 31. | Credit is given to ________as the organizer of the first cooperative in the United States. | a. | Benjamin Franklin | c. | Thomas Jefferson | | b. | George Washington | d. | Patrick Henry | | | | | | |
| | 32. | The ___________ is incorporated under laws of the District of Columbia as an education organization. | a. | American Institute of Cooperation | | b. | Farm Credit Council | | c. | National Cooperative Business Association | | d. | National Council of Farmer Cooperatives | | | | |
| | 33. | People join cooperatives to _____________________. | a. | Make new friends | c. | Gain economic benefits | | b. | Develop a tax shelter | d. | Guarantee a profit | | | | | | |
| | 34. | Cooperatives are generally classified by their major activity. Which of the following is not a usual classification: | a. | Marketing | b. | Purchasing | c. | Lobbying | d. | Service | | | | | | | | | | |
| | 35. | Three groups of people are essential to start a cooperative and operate it successfully. Which of the following is not a key group: | a. | Members | b. | Management | c. | Employees | d. | Investors | | | | | | | | | | |
| | 36. | Cooperatives can operate at lower costs per unit than farmers can individually by: | a. | Providing services for several or many farmers | | b. | Hiring inexperienced managers | | c. | Handling smaller volumes | | d. | All of these are correct | | | | |
| | 37. | A cooperative that increases competition in a market could: | a. | Raise the going market prices for farm products | | b. | Keep other firms from taking advantage of farmers | | c. | Make the market more competitive | | d. | All of these are correct | | | | |
| | 38. | Cooperatives limit returns on equity capital because: | a. | Cooperatives do not require as much capital as investor-oriented businesses | | b. | They are not concerned about making a profit | | c. | They want to discourage investments by patrons | | d. | All of these are correct | | | | |
| | 39. | Cooperatives increase farm income by: | a. | Providing farmers higher prices for their products and lower prices for farm supplies | | b. | Increasing per-unit costs | | c. | Not distributing any net savings | | d. | All of these are correct | | | | |
| | 40. | Cooperatives are organized to: | a. | Maximize net income | | b. | Minimize costs of operation | | c. | Provide services as economically as possible | | d. | All of these are correct | | | | |
| | 41. | Cooperatives benefit farmers because: | a. | Individual farmers produce relatively small volumes | | b. | Individual farmers produce so many different products that are well known to consumers | | c. | Individual farmers produce large volumes | | d. | All of these are correct | | | | |
| | 42. | A supply cooperative that “operates at cost”: | a. | Charges less than the going market price | | b. | Charges prevailing market prices | | c. | Charges pricing for supplies that are about equal to its costs | | d. | All of these are correct | | | | |
| | 43. | A cooperative is organized: | a. | For member investment purposes | | b. | To provide members a return on investments | | c. | To provide economic services to its members | | d. | To generate economic benefits for the general public | | | | |
| | 44. | A cooperative may be organized for the following reason: | a. | To improve bargaining power when dealing with other businesses | | b. | To increase marketing and purchasing costs | | c. | To limit market access | | d. | All answers are correct | | | | |
| | 45. | By working together in a cooperative, farmers can: | a. | Reduce their bargaining power | | b. | Maintain their same level of operating efficiency | | c. | Decrease their marketing and purchasing costs | | d. | Increase market access | | | | |
| | 46. | The number of U.S. agricultural cooperatives peaked in: | a. | 1850 | b. | 1930 | c. | 1950 | d. | 1990 | | | | | | | | | | |
| | 47. | Declining numbers of U.S. agricultural cooperative is a function of: | a. | Lack of interest of farmers in cooperatives | | b. | Consolidations, changing industry structure and declining farm numbers | | c. | Changes in tax laws | | d. | Farmers having better alternatives | | | | |
| | 48. | How many farm marketing, supply, and related service cooperatives operate in U.S.: | a. | Fewer than 3,000 | c. | About 20,000 | | b. | About 5,000 | d. | More than 1,000,000 | | | | | | |
| | 49. | A cooperative may be organized for the following reason: | a. | To improve bargaining power when dealing with other businesses | | b. | To increase marketing and purchasing costs | | c. | To limit market access | | d. | All of these are correct | | | | |
| | 50. | By working together in a cooperative, farmers can: | a. | Reduce their bargaining power | | b. | Maintain their same level of operating efficiently | | c. | Decrease their marketing and purchasing costs | | d. | Increase market access | | | | |
| | 51. | The number of U.S. agricultural cooperatives peaked in: | a. | 1850 | b. | 1930 | c. | 1950 | d. | 1990 | | | | | | | | | | |
| | 52. | Declining numbers of U.S. agricultural cooperatives is a function of: | a. | Lack of interest of farmers in cooperatives | | b. | Consolidations, changing industry structure, and declining farm numbers | | c. | Changes in tax laws | | d. | Farmers having better alternatives | | | | |
| | 53. | How many farm marketing, supply, and related service cooperatives operate in U.S.: | a. | Fewer than 3,000 | c. | About 20,000 | | b. | About 5,000 | d. | More than 1,000,000 | | | | | | |
| | 54. | U.S. cooperatives exist in: | a. | A few types of business activities | | b. | Nearly every type of agricultural business activity | | c. | Agricultural activities only | | d. | Midwest only | | | | |
| | 55. | Agricultural cooperatives are so small they are not among the 500 largest U.S. industrial corporations: |
| | 56. | The gross value of farm products marketed by U.S. farm cooperatives has: | a. | Decreased | b. | Increased | c. | Remained constant | | | | | | | | |
| | 57. | The majority of U.S. commercial farmers are involved in cooperatives: |
| | 58. | The agricultural commodity sector in U.S. where producers market the highest percentage of that commodity through cooperatives is the: | a. | Livestock sector | c. | Grain sector | | b. | Dairy sector | d. | Fruit and vegetable sector | | | | | | |
| | 59. | The agricultural commodity sector in the U.S. where producers market the lowest percentage of that commodity through cooperatives is the: | a. | Livestock sector | c. | Grain sector | | b. | Dairy sector | d. | Fruit and vegetable sector | | | | | | |
| | 60. | What percentage of agricultural supplies do U.S. producers purchase through cooperatives: | a. | Less than 10% | b. | About 25% | c. | About 75% | d. | Nearly 100% | | | | | | | | | | |
| | 61. | Objectives of marketing cooperatives include: | a. | Assure farmers dependable service | | b. | Maximize income from sale of member products | | c. | Provide information to farmers | | d. | All of the answers are correct | | | | |
| | 62. | Marketing cooperatives try to maximize member’s income through/by: | a. | Adding value from processing operations | | b. | Reducing per unit marketing costs by handling large volumes | | c. | Elimination of all other competitors | | d. | Two answers are correct | | | | |
| | 63. | Marketing cooperatives are owned by: | a. | Investors | c. | Federal government | | b. | Producers of farm products | d. | Manager and employees of the co-op | | | | | | |
| | 64. | Bargaining cooperatives: | a. | Negotiate with farmers for products | | b. | Negotiate with processors on behalf of farmer-members | | c. | Negotiate for farm labor | | | | |
| | 65. | The most common sales method used by marketing cooperatives is: | a. | Auctions | c. | Buy-and-sell | | b. | Bargaining | d. | Road side stands | | | | | | |
| | 66. | Bargaining cooperatives negotiate for: | a. | Product grade and quality variations | c. | Delivery schedules | | b. | Product prices | d. | All of these are correct | | | | | | |
| | 67. | An advantage of the buy-and-sell method is: | a. | The cooperative controls the marketing decisions | | b. | Farmers make their own decisions on when to sell their products | | c. | Farmers always sell at the market’s high | | | | |
| | 68. | Pooling is a cooperative marketing method involving: | a. | Assembling or collecting products from many producers | | b. | Combining sales returns and operating expenses, and distributing net returns to members according to the volume of product each provide | | c. | Paying all pool members the same price regardless of quality | | d. | Two answers are correct | | | | |
| | 69. | Payments to producers from commodity pools are made: | a. | In one lump sum when the commodity is delivered | | b. | In a series of payments as the commodity is marketed | | c. | In one lump sum after the product is sold | | d. | To the Federal government | | | | |
| | 70. | Advantages of commodity pools include: | a. | Spreads market risks | c. | Helps finance the cooperative | | b. | Permits orderly marketing | d. | All of these are correct | | | | | | |
| | 71. | Patronage refunds may be calculated on the basis of: | a. | Dollar value of business done with a cooperative | | b. | Physical units of business done with a cooperative | | c. | A combination of dollar value and physical units | | d. | All of these answers are correct | | | | |
| | 72. | Most of the equity of marketing and farm supply cooperatives comes from: | a. | Per-unit capital retains | c. | Retained patronage refunds | | b. | The direct cash investment of members | d. | Unallocated reserves | | | | | | |
| | 73. | Fixed assets do NOT include: | a. | Inventory of products for resale | c. | Equipment | | b. | Buildings | d. | Land | | | | | | |
| | 74. | Current liabilities do NOT include: | a. | Accounts payable | c. | Short-term loans | | b. | Accrued expenses | d. | Retained earnings | | | | | | |
| | 75. | Total liabilities do NOT include: | a. | Fixed assets | c. | Other assets | | b. | Investments in other cooperatives | d. | All answers are correct | | | | | | |
| | 76. | A farmer cooperative is a type of business that: | a. | Buys things, like grain and milk | | b. | Sells things, like fertilizer and feed | | c. | Invests money in buildings and equipment | | d. | Makes and loses money | | e. | All answers are correct | | | | |
| | 77. | Land, buildings, and equipment are examples of a cooperative’s: | a. | Member quality | b. | Assets | c. | Liabilities | | | | | | | | |
| | 78. | A balance sheet for a cooperative does NOT contain information on: | a. | The money a cooperative borrows | c. | The amount a cooperative sells | | b. | What a cooperative owns | | | | | | | | |
| | 79. | A cooperative should be operated to make a profit for: | a. | Only the people who invest in it | c. | Only full-time farmers | | b. | The members who use it | | | | | | | | |
| | 80. | The cost of borrowing money is called interest paid. |