ACP 329: Farm Enterprise Management Midterm Examination Reviewer
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Questions and Answers

What is the main purpose of proper recording in farm management?

  • To record all farm activities
  • To improve farm accounting practices
  • To avoid overestimation and underestimation of financial reports (correct)
  • To maximize financial reports

    • Which of the following is NOT a basic accounting term mentioned in the lesson?

  • Revenue (correct)
  • Asset
  • Debit
  • Profit

    • What is the main purpose of the Income Statement in an accounting system?

  • To assess the financial condition of the business
  • To record annual depreciation on assets
  • To make informed decisions and improve farm management
  • To assess farm performance (correct)

    • What is the definition of net farm income?

    <p>Total revenue minus total expenses</p> Signup and view all the answers

    What is the purpose of a depreciation schedule in farm accounting?

    <p>To record annual depreciation on depreciable assets</p> Signup and view all the answers

    Which of the following is NOT a characteristic of a depreciable asset?

    <p>Has a salvage value at the end of its useful life</p> Signup and view all the answers

    What is the primary objective of farming as a business?

    <p>Increasing production and productivity</p> Signup and view all the answers

    Which of the following is NOT mentioned as one of the roles of a manager in the lesson on Farm and Farm Management Concepts?

    <p>Agricultural roles</p> Signup and view all the answers

    What is the main purpose of the implementation process in farm management according to the lesson?

    <p>To adapt to unforeseen changes</p> Signup and view all the answers

    According to the lesson, what is the significance of obtaining various information about the farm for better farm management?

    <p>To enhance agricultural productivity</p> Signup and view all the answers

    What is the definition of management provided in the lesson on Farm and Farm Management Concepts?

    <p>Coordinating human, physical, and financial resources for human goals</p> Signup and view all the answers

    What is one of the challenges faced by farmers regarding the standardization of farm products according to the lesson?

    <p>Difficulty in maintaining product quality</p> Signup and view all the answers

    What is the purpose of using the Straight-Line Method (SLM) for calculating depreciation?

    <p>To give the same annual depreciation for each full year of an item's life</p> Signup and view all the answers

    Which method of computing depreciation involves a constant percentage value or rate that declines each year?

    <p>Declining Balance Method</p> Signup and view all the answers

    What is the purpose of the Partial-Year Depreciation method?

    <p>To calculate depreciation for assets purchased during the year</p> Signup and view all the answers

    Which valuation method values an asset at its original cost?

    <p>Cost Method</p> Signup and view all the answers

    What is the purpose of a balance sheet according to the text?

    <p>To estimate the net worth or owner equity of a business</p> Signup and view all the answers

    Which concept measures the ability of a business to generate cash when needed without disrupting its normal operations?

    <p>Liquidity</p> Signup and view all the answers

    What is NOT a challenge in farm management in the 21st century according to the text?

    <p>Decrease in productivity</p> Signup and view all the answers

    Which of the following is a new technology that can aid in the monitoring of yields efficiently in the 21st century?

    <p>Global Positioning System (GPS)</p> Signup and view all the answers

    What are the four general business strategies farmers can choose from in the 21st century according to the text?

    <p>Low Volume, High-Value; High Volume, Low-Margin; Specialty Product and Service; Part-time Operators</p> Signup and view all the answers

    What is an 'undifferentiated' agricultural product?

    <p>A product that is identical regardless of source</p> Signup and view all the answers

    What is the purpose of analyzing liquidity and solvency based on the balance sheet?

    <p>To assess the financial health and stability of the business</p> Signup and view all the answers

    Which of the following is NOT considered a revenue on an income statement?

    <p>Interest earned on investments</p> Signup and view all the answers

    When is the gain or loss on sales of capital assets recognized on an income statement?

    <p>When the asset is sold</p> Signup and view all the answers

    What is the formula for calculating Return on Investment (ROI)?

    <p>ROI = Net Farm Income / Total investment</p> Signup and view all the answers

    What does a higher ROI value indicate?

    <p>Higher profitability of the farm enterprise</p> Signup and view all the answers

    What does a negative Net Farm Income indicate?

    <p>The farm enterprise is experiencing losses</p> Signup and view all the answers

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