General Knowledge 3

Question 1

The best measure of a farm’s ability to make a short-term loan payment is:

Answer 1

current ratio

Question 2

Before fertilizing and planting, the costs of seed and fertilizer would normally be considered:

Answer 2

variable costs

Question 3

Cooperatives pay patronage refunds according to

Answer 3

amount of business done by patron

Question 4

The total tax deduction for conservation expenses in any tax year is limited to ____% of your gross income from farming for the year?

Answer 4

25%

Question 5

The supply curve shows the relationship between

Answer 5

price and the quantity supplied

Question 6

By adding a cattle or hogs enterprise to a corn and soybean farm a producer becomes more

Answer 6

diversified

Question 7

The deadline for a crop insurance application for corn in Missouri is

Answer 7

March 15

Question 8

The best indication that a farmer is making financial progress year-to-year is:

Answer 8

an increase in net worth on the balance sheet

Question 9

MO FFA Farms has a real estate loan with a principal balance of $200,000. The interest rate is 5% and the total annual payment is $18,000. The amount listed as a Non-Current Liability on their beginning of the year balance sheet is:

Answer 9

$192,000

Question 10

A contract that gives its owner the right but not the obligation to buy or sell a futures contract at a certain price for a certain period of time:

Answer 10

Option

Question 11

For tax purposes, a new machine shed built and completed in October of 2021 has a depreciable life of:

Answer 11

20 years

Question 12

The maximum amount that a wife can inherit from her husband without owing any federal estate tax is:

Answer 12

Unlimited

Question 13

The enterprise budget shows the net income earned from:

Answer 13

Each major production or service activity on the farm

Question 14

A demand curve represents a relationship between:

Answer 14

price and quantity purchased

Question 15

Which crop does not have the correct weight (lbs) per bushel listed with it?

Grain Sorghum-56
Corn- 56
Wheat- 60
Soybeans-56

Answer 15

Soybeans- 56

Question 16

When adding corn acres to an operation, which cost is most likely to change?

Answer 16

Fixed cost per acre

Question 17

For an enterprise budget to be effective, which of the following should not be used?

Answer 17

*Custom rental rate on owned equipment
*Local hourly wage rate for management
*Family living expense
*A value for cash rent on owned ground

Question 18

An LLC (Limited Liability Company) is usually

Answer 18

Taxed like a partnership

Question 19

Price that must be paid for the purchase of an options contract

Answer 19

Premium

Question 20

Which of the following is considered Schedule F farm income?

Answer 20

Sale of corn and soybeans

Question 21

MO FFA Farms is scheduled to receive the final installment of their 2020 Coronavirus Food Assistance Program in January 2022. The CFAP payment should be listed on the ending 2021 Balance Sheet as a

Answer 21

Current Asset

Question 22

Which of the following is not a supply shifter for farm products?

New technology
Weather
Government programs
Consumer income

Answer 22

Consumer income

Question 23

What is managing price or market risk by taking an opposite position in the futures market from that held in the cash market?

Answer 23

Hedging

Question 24

Which Financial Ratio is used to evaluate the Liquidity of a farm business?

Answer 24

Current Ratio

Question 25

When an increase in production of one enterprise causes a reduction in the production of another enterprise, the two enterprises are said to be_____.

Answer 25

Competitive

Question 26

Total Assets minus Total Liabilities equals:

Answer 26

Net Worth

Question 27

The ability of larger firms to be more profitable than smaller firms in the same industry is an example of

Answer 27

economies of scale

Question 28

What is a legally binding agreement made on a future exchange to buy or sell a commodity?

Answer 28

Futures Contract

Question 29

The IRS form used to calculate self-employment tax is:

Answer 29

Schedule SE

Question 30

If a farmer is to carry a hedge through t completion, the farmer

Answer 30

must be prepared to meet all margin cells

Question 31

A grain farmer who normally stores his soybeans at a local elevator has decided to use the options market to create a synthetic storage. To do so he will sell his beans at harvest and

Answer 31

buy a call option

Question 32

A farm's current inventory is not large enough to repay last year's operating loan. Their lender agrees to refinance part of their operating loan balance into a 7-year term loan secured by real estate.

Answer 32

Working capital

Question 33

The maximum amount that can be claimed as a Section 179 expense deduction on 2021 tax return is:

Answer 33

$1,050,000

Question 34

Using the "rule of 72" how long will it take an investment to double at 6% interest?

Answer 34

12 years

Question 35

The 2021 standard mileage rate for the cost of operating your car, van, pickup or panel truck for each business use mile is:

Answer 35

$0.56

Question 36

For tax year 2021, the social security wage base was:

Answer 36

$142,800

Question 37

The self-employment tax rate for Medicare is:

Answer 37

2.90%

Question 38

What is the difference between local cash price and price of the expiring futures contract?

Answer 38

Basis

Question 39

A farmer should issue an IRS form 1099-NEC for which of the following? *$850 paid to a neighbor for two steers *$625 paid to a neighbor for building fence *$500 paid to a neighbor for building fence *$850 paid to a neighbor for hay *$650 paid to a neighbor for firewood

Answer 39

$625 paid to a neighbor for building fence

Question 40

When required, you must send and IRS form 1099-MISC to the individual paid by:

Answer 40

January 31