FARM BUSINESS MANAGEMENT CDE | 2026 UPDATE |
QUESTIONS AND ANSWERS 100% CORRECT
First step in decision making process Answer - Define the problem
Short term goals are normally achieved in Answer - 1 year
How do you find liquidity current ratios Answer - Divide current assets by
current liabilities
How do you find liquidity working capital Answer - Subtract current assets by
current liabilities
How do you find liquidity debt structure Answer - Current liabilities divided by
total liabilities x 100
How do you find liquidity asset structure Answer - Current assets divided by
total assets x 100
Cash flow budget projects what over a specific time period ? Answer - Money
flow, receipts, expenditures
Modern farming is best described as Answer - Capital intensive
, A farm budget is Answer - A prediction of what will happen
Fixed or long term assets Answer - Items which are at least marketable and
least readily converted into cash without loss
sole proprietorship Answer - Most common form of business arrangement in
the US
Long term credit should be used for such items as Answer - Value reduction,
amortization, diminishing returns
Stock certificates Answer - When you incorporate a farm business, the assets
of the business are transferred to the corporation in exchange for
Receipts Answer - Income received from sales of commodities produced,
services rendered, etc.
Liabilities Answer - All your debt obligation to others
Accrual method of counting Answer - Method of cash transactions to
determine income
Accrual method of counting 2 Answer - Farmer includes fluctuations in
inventory to determine income at the end of the year, he is using the
equilibrium price Answer - Price at which consumers are willing to buy all that
producers are willing to supply to the market
QUESTIONS AND ANSWERS 100% CORRECT
First step in decision making process Answer - Define the problem
Short term goals are normally achieved in Answer - 1 year
How do you find liquidity current ratios Answer - Divide current assets by
current liabilities
How do you find liquidity working capital Answer - Subtract current assets by
current liabilities
How do you find liquidity debt structure Answer - Current liabilities divided by
total liabilities x 100
How do you find liquidity asset structure Answer - Current assets divided by
total assets x 100
Cash flow budget projects what over a specific time period ? Answer - Money
flow, receipts, expenditures
Modern farming is best described as Answer - Capital intensive
, A farm budget is Answer - A prediction of what will happen
Fixed or long term assets Answer - Items which are at least marketable and
least readily converted into cash without loss
sole proprietorship Answer - Most common form of business arrangement in
the US
Long term credit should be used for such items as Answer - Value reduction,
amortization, diminishing returns
Stock certificates Answer - When you incorporate a farm business, the assets
of the business are transferred to the corporation in exchange for
Receipts Answer - Income received from sales of commodities produced,
services rendered, etc.
Liabilities Answer - All your debt obligation to others
Accrual method of counting Answer - Method of cash transactions to
determine income
Accrual method of counting 2 Answer - Farmer includes fluctuations in
inventory to determine income at the end of the year, he is using the
equilibrium price Answer - Price at which consumers are willing to buy all that
producers are willing to supply to the market
