Farm and Agribusiness Management CDE Practice Test

These questions are part of the practice quiz. Start practicing

• What does the term "variable costs" refer to in farm management?
• Who is currently recognized as the Secretary of Agriculture?
• What day does a calendar year begin?
• What river forms the eastern border of Nebraska?
• What does "environmental stewardship" refer to in farming?
• Which of the following is a common strategy for risk management in agriculture?
• What is the primary advantage of forming a Limited Liability Company (LLC) for an agribusiness?
• Which of the following is NOT considered a fixed cost related to owning farm assets?
• What best describes agricultural cooperatives?
• Which of the following is NOT a financial statement?
• What term describes the increased worldwide trade in agricultural products?
• What is the significance of improved management practices in agriculture?
• Which of the following products has the most elastic supply?
• What is one benefit of farm diversification?
• Which factor is key in affecting land value in agriculture?
• What is agricultural extension, and why is it important?
• When should a farm shut down production in the short run?
• What economic principle can help farmers determine the best crop to plant each season?
• What is meant by "sustainable agriculture"?
• 50 pound salt licks and 100 pound salt licks would be categorized as what type of inputs?
• What is the primary function of a farm management plan?
• What does the term "agribusiness" refer to?
• What type of resource does a shovel represent?
• Which of the following is a benefit of using precision agriculture technologies?
• Which of the following is considered a market?
• Why might a manager opt for MACRS or double declining balance as a depreciation method?
• In a sole proprietorship, what overall advantage can be cited that encourages many to choose this business structure?
• In terms of farm management practices, what does ROI stand for?
• If a farm has negative cash flow, what is the correct status of the farm?
• Which is an example of a non-renewable resource in agriculture?
• What is the cash basis of accounting?
• Recently, Super Saver raised their donut prices from $.60 to $.88. What is the most likely reason for this increase?
• In the case of two farmers with identical methods, which is likely to have greater cash flow: the renter or the owner?
• A net present value calculation compares what aspects of an investment?
• What is the principal balance at the end of a fully-amortizing loan for $200,000?
• What is the main technological production difference between corn grown in eastern and western Nebraska?
• In the context of farming decisions, what does opportunity cost refer to?
• If a loan is secured to an asset using a mortgage, what is the security of the loan?
• Which financial ratio is most commonly used to assess a farm's liquidity?
• What common method do farmers use to assess market trends?
• Why is lease duration important in land leasing agreements?
• What is generally considered an essential factor for effective risk management in agribusiness?
• Which metric is NOT typically used to assess farm performance?
• What type of risk is associated with fluctuating prices of agricultural commodities?
• What are Variable Costs characterized by?
• How does consumer behavior influence agribusiness?
• How does risk management apply to agribusiness?
• What is a SWOT analysis in farm management?
• What represents a crucial aspect of water management in agriculture?
• When discussing costs, what is the primary characteristic of fixed costs?
• What are the benefits of sustainable farming practices?
• Which of the following is the simplest precaution against financial, market, and production risk?
• Which of the following is a goal of agricultural cooperatives?
• Which farm machinery manufacturer is known for their green paint?
• How can farmer's markets benefit local economies?
• Over the last fifty years, what trend has been observed regarding the number and size of farms?
• What role do cooperatives play in agriculture?
• What critical consideration differentiates growing and consolidating agricultural businesses?
• Which of the following describes the benefit of strategic land use?
• What type of budget forecasts revenues and expenses for a single production unit on a farm?
• How does spreading sales minimize market risk?
• How can cooperatives assist farmers financially?
• What is defined as "value-added agriculture"?
• A farm has current assets of $50,000, non-current assets of $4,500,000, and liabilities of $4,000,000. What is the value of this farm's owner's equity?
• If a farmer obtains a "non-recourse" loan from the government, how is the loan repaid if crop production does not generate enough revenue?
• What role does production efficiency play in farming operations?
• What is the purpose of crop insurance in agriculture?
• What condition exists when the price is higher than the market equilibrium?
• In what manner does genetic engineering impact crop nutrients?
• What crop enterprise is usually grown in rotation with corn?
• What type of budget requires predicting both revenues and expenses for a certain period?
• In Nebraska, during which season is corn typically planted?
• What is farm diversification?
• What does the "matching principle" in accounting aim to correlate?
• What might be a consideration when conducting a break-even analysis?
• How does genetic engineering contribute to crop improvement?
• How do market conditions influence agribusiness decisions?
• Where can a farmer obtain information on production costs for coconuts?
• At the production quantity where MR=MC, profit is?
• Which asset is most likely to have a salvage value of $0?
• What is a common practice for managing operational costs on a farm?
• Which of the following is an asset?
• What does Farm Credit primarily provide to farmers?
• Day-to-day management is also referred to as ________ management.
• What is the primary purpose of a marketing plan in agribusiness?
• Which of the following represents a change in technology in agricultural production?
• What factor is crucial for evaluating risk when considering new market opportunities in agribusiness?
• Which of the following is considered a commodity?
• How is an operating agreement distinct from a partnership?
• What is the first step in the decision-making problem?
• What type of entry reflects the use of fertilizer purchased in a different accounting period in accrual accounting?
• During which farm life cycle stage is a farmer likely to take risks to expand operations?
• Which of the following is an example of a non-variable cost in farming?
• Must depreciable assets be sold once their defined useful life ends according to IRS rules?
• What is the capital city of Nebraska?
• What is the primary benefit of diversification in agribusiness?
• In a fully-amortizing loan, P and I refer to which terms?
• What is the book value of an asset purchased for $100,000 with a salvage value of $10,000 after 6 years of straight-line depreciation over 10 years?
• Which of the following states has the highest farm output per person?
• What is the role of agricultural policy in farm management?
• Which type of risk do forward contracts primarily help to mitigate?
• A sole proprietorship can have multiple owners, such as a married couple, is this statement true or false?
• Describe the term "precision agriculture."
• What characterizes agroecology as an approach to farming?
• Why is budgeting important in farm management?
• Which financial term refers to the sale of assets to meet liabilities?
• During which decade did farmland prices escalate quickly, leading to the Farm Debt Crisis?
• Which of the following is a characteristic of variable costs in farming?
• What is a balance sheet in agribusiness?
• What state is directly south of Nebraska?
• In accrual accounting, what is a "left side" entry known as?
• What does IRS stand for?
• What is another term for a fixed cost in agribusiness?
• How does climate change affect agricultural practices?
• Which term describes the maximum output achievable from a given set of inputs?
• What does the abbreviation "cwt" stand for in agricultural terms?
• What does the term "asset fixity" refer to in agricultural economics?
• What basic macroeconomic principle explains why money earned in the future is worth less than money in the present?
• Which of the following is currently used as an input for a cattle feed ration?
• How many acres are there in one square mile?
• If a firm has a current ratio less than 1, what overall condition is assumed?
• What is the primary benefit of residue management in agriculture?
• What are the essential components of a farm business plan?
• What effect will Ralph's departure have on the market for the commodities he produces?
• Commodity corn production is an example of which farming type?
• As corn prices increase, what should a farmer do regarding fertilizer to maximize profit?
• If one partner borrows money against partnership property, who is liable for the debt?
• If an industry is perfectly competitive, what type of products are sold?
• On a balance sheet, what must balance?
• Define "direct marketing" in the context of agriculture.
• What is break-even analysis used to determine?
• What kind of information is typically included in an income statement?
• Which of the following is a result of high-volume, low margin production?
• What would be an input for feedlot production related to beef cattle weight gain?
• Why is unpaid family labor included in many farm financial ratios?
• What is the purpose of a feasibility study in agribusiness?
• If one farmer rents and another owns with a mortgage, which will likely show a higher profit?
• What happens to a partnership when one partner tragically dies?
• Why is water management significant in agriculture?
• Which financial statement shows the profitability of a farm operation over a specific period?
• If a farmer borrows $1,000,000 with an interest-only loan at 12%, what is the monthly payment?
• Which of the following would not be reflected as Revenue on a farmer's yearly accrual-based income statement?
• What does "comparative advantage" in agriculture refer to?
• Which state has the highest output (as measured in dollars) of total farm production?
• What outcome is sought through environmental stewardship in agriculture?
• Which of the following could improve negative cash flow?
• If Joe and Mary’s farm has a current ratio of 1.5 and liabilities of $200,000, what is the value of their current assets?
• What is the primary advantage of cash accounting over accrual accounting?
• What is the significance of break-even analysis in agribusiness?
• When should accounting transactions be recorded in a cash accounting system?
• What is the primary basis for value addition in agribusiness?
• How can efficient farm management contribute to profitability?
• Should farmers and ranchers consider sunk costs when making production decisions?
• What is the primary benefit of forming a partnership in an agricultural enterprise?
• What is the primary function of risk assessment in agricultural decision-making?
• The __________ function shows the relationship between one input and total output.
• Which crop produces the most revenue for Nebraska farmers each year?
• Which of the following is NOT a function of management?
• Why do farmers analyze cash flow?
• What is the main advantage of a sole proprietorship?
• What is an example of a fixed cost in an agricultural business?
• How does technology impact modern farm management?
• What does the term "liquidity" refer to in agribusiness?
• Which type of cost is incurred in the past and cannot be recovered?
• What is another name for a profit and loss statement?
• What is the primary purpose of farm management?
• What does a comprehensive farm plan typically include?
• Nintendo released a miniature version of their classic game console for $60, which has consistently sold out. This situation exemplifies market failure due to what?
• A farmer borrows $1,000,000 to purchase farmland. If he is making monthly payments on an interest-only loan with a 12% interest rate, what is the principal balance?
• Which factors are typically included in land leasing agreements?
• For most agricultural producers, the marginal revenue of producing one more unit of output is_____?
• What does "crop rotation" refer to?
• What financial metric indicates the overall efficiency of a farm operation?
• What is the significance of soil testing in crop production?
• Why is diversification of crops considered a risk management strategy?
• What is "supply chain management" in agribusiness?
• Which accounting method requires recognizing income and expenses when they are incurred, regardless of cash flow?
• If you invest $100 for two years at 10% interest, compounded annually, how much do you have at the end of two years?
• Why is depreciation considered a "non-cash" expense?
• What is the main purpose of budgeting in agribusiness management?
• What is the expected value if a precautionary treatment is applied for a 20% chance of a major insect infestation that reduces per acre profits by $60?
• What is one of the primary goals of agribusiness management?
• Which strategy could lead to economies of scale?
• Which factors can lead to increased agricultural productivity?
• Can a farm show profits on the income statement while having cash flow issues?
• If Corn and Milo are perfect substitutes for chicken feed, which should a cost minimizing producer use if corn is $0.10/lb and milo is $0.08/lb?
• In SMART goal-setting, what does the "S" stand for?
• Which factor is most likely to affect the supply of a crop in the market?
• Which is NOT a part of assessing farm performance metrics?
• What percentage of farms in the United States are considered part time?
• Which aspect plays a crucial role in determining supply elasticity?
• What defines fixed costs in an agricultural context?
• A government "set aside" program incentivizes farmers by paying them to not produce. Which aspect of the farm "problem" does this address?
• How much interest is paid in the first year on a $200,000 fully-amortizing loan at a 10% interest rate?
• What are genetically modified organisms (GMOs) used for in agriculture?
• Which financial tool is commonly used to finance agricultural purchases?
• What does the concept of economies of scale imply in agribusiness?
• What does a robust supply chain management strategy improve?
• How does cash flow management benefit an agribusiness?
• How can agricultural producers best help themselves obtain credit (bank loans)?
• The statement, "Here at Little Susie's we aim to provide customers with thirst quenching, delicious lemonade at reasonable prices," is an example of?