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 (C)</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 (A)</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 (B)</p> Signup and view all the answers

What is the primary objective of farming as a business?

<p>Increasing production and productivity (C)</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 (C)</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 (C)</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 (B)</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 (A)</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 (C)</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 (C)</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 (C)</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 (A)</p> Signup and view all the answers

Which valuation method values an asset at its original cost?

<p>Cost Method (B)</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 (A)</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 (D)</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 (A)</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) (A)</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 (C)</p> Signup and view all the answers

What is an 'undifferentiated' agricultural product?

<p>A product that is identical regardless of source (A)</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 (B)</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 (D)</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 (C)</p> Signup and view all the answers

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

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

What does a higher ROI value indicate?

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

What does a negative Net Farm Income indicate?

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

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