Name: 
 

2003 North Carolina State Junior Farm Business Management Test



Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 

What reduces the value of money?
a.
inflation
c.
cutting it in half with scissors.
b.
deflation
d.
hiding it under a mattress
 

 2. 

The two types of accounting systems that farmers can use for income tax purposes are:
a.
formal and informal
c.
cash and accrual
b.
cash and non-cash
d.
on the books and off the books
 

 3. 

The purpose of income tax management is to:
a.
simplify your farm’s revenue and expenses.
b.
hide as much farm income as possible.
c.
minimize what your send to the Internal Revenue Service.
d.
maximize after tax profits.
 

 4. 

The most common legal structure of farm businesses in the United States is the:
a.
sole proprietorship.
c.
regular corporation.
b.
partnership.
d.
subchapter S cooperative.
 

 5. 

Patrons are:
a.
the people that buy and sell commodities on the Chicago Board of Trade
b.
the owners of a cooperative.
c.
the opposite of matrons.
d.
tax deductions for a cooperative.
 

 6. 

A legal statement of a person’s wishes concerning the disposal of property after their death is called a:
a.
will.
c.
power of attorney.
b.
trust.
d.
the law of descendents.
 

 7. 

Someone who owns land bordering a stream is called:
a.
darn lucky!
b.
riparian.
c.
joint tenancy.
d.
fee simple.
 

 8. 

Assets are:
a.
always equal liabilities.
b.
what the farm business owes to creditors.
c.
the same as owner’s equity.
d.
items that have value.
 

 9. 

The value of a resource in its next best use is called:
a.
variable cost.
c.
opportunity cost.
b.
marginal cost.
d.
total cost.
 

 10. 

Debt is:
a.
the obligation to pay.
c.
owners equity
b.
items that have not market value.
d.
accounts receivable.
 

 11. 

The difference between the book value or basis of an asset and the sale price of the asset is called
a.
profit or loss
c.
capital gain or loss.
b.
positive or negative cash flow.
d.
making money on the sale.
 

 12. 


At the end of the year, a farmer owes $550 to the local machinery repair shop. It would be shown on the farm’s balance sheet as
a.
an account payable
c.
a prepaid expense
b.
an account receivable
d.
an asset
 

 13. 

A term which has the same meaning as owner’s equity is:
a.
total asset value.
c.
net worth.
b.
net farm income.
d.
total liabilities.
 

 14. 

A demand curve represents a relationship between:
a.
total cost and total value.
c.
price and quantity produced.
b.
price and quantity purchased.
d.
profits and losses.
 

 15. 

A projection of all income and expenses associated with growing an acre of a particular crop would be called:
a.
a partial budget.
c.
a whole farm budget.
b.
an enterprise budget.
d.
a balance budget.
 



 
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