Test 1

Question 1

The means for comparing agricultural business organizations include all of the following

Answer 1

resource acquisition, continuity of existence, liability of the owners

Question 2

The major difference between a “C” and “S” corporation is:

Answer 2

The way taxes are handled

Question 3

Since WWII agriculture has become:

Answer 3

More specialized in production, less dependent on human labor, more dependent on the rest of the economy, less dependent on the inputs produced on the farm

Question 4

Future of agribusiness includes the following:

Answer 4

futher consolidation and concentration throughout the vertical marketing system, use of information technology to lower the transaction costs, bio-technology in not only in plant area but also in animal sector, e.g. breeding, niche marketing and brand identification.

Question 5

The major advantages of corporation are

Answer 5

perpetual life, treated as a legal person, profits taxed at corporate tax rate, can separate corporate asset from personal asset

Question 6

a mjaor advantage of a limited liability corporation (LLC) is

Answer 6

no tax as a business

Question 7

The limited Liability partnership

Answer 7

is another name for the limited partnership

Question 8

What is the maximum number of shareholders allowed in an S corporation?

Answer 8

100

Question 9

Accord to the textbook, the benefits of Incorporation (creating a corporation) for small agribusiness entities include

Answer 9

limited personal liability
continuity of operation
estate planning

Question 10

According to your textbook, the three types of partnerships include

Answer 10

limited partnership
registered limited liability partnership
general partnership

Question 11

agricultural input sector would include

Answer 11

farmers, agricultural financing

Question 12

the production sector would include

Answer 12

ranchers

Question 13

the processing-manufacturing sector would include

Answer 13

food processing

Question 14

How much do we produce as a country?

Answer 14

12% agricultural output

Question 15

How much do we export?

Answer 15

27% of US production

Question 16

how many people can each farmer feed?

Answer 16

114 people

Question 17

The vertical stages of the agribusiness system

Answer 17

Farm input supplies
farm production
food processing
food wholesaling 
food retailing

Question 18

average farm

Answer 18

equals more than 400 acres and over $450,000 in assets

Question 19

The processing - manufacturing sector has

Answer 19

over 5 million workers and 600,000 outlets

Question 20

Largest share of US Farm expenditures

Answer 20

Crop Sector

Question 21

Sole proprietorship

Answer 21

a business owned and managed by one individual

Question 22

Advantages of a Sole Proprietorship

Answer 22

Simple to create
least costly
profit incentive
Total decision making authority

Question 23

Disadvantages of a Sole Proprietorship

Answer 23

Unlimited personal liability
Limited skills and capability
feelings of isolation
limited access to capital

Question 24

Partnership

Answer 24

as association of two or more people who co-own a business for the purpose of making profits
governed by the uniform partnership act

Question 25

The three types of partnerships include

Answer 25

ordinary (general) partnership Limited Partnership registered limited liability partnership

Question 26

General Legal Characteristics of a Partnership

Answer 26

``` Participation in management decisions joint ownership of assets profits/losses are shared Firms name Joint bank account Single set of business records ```

Question 27

Written Partnership Agreements

Answer 27

Control in business decisions | Control over real and personal property

Question 28

Partnership Advantages

Answer 28

``` easy to establish complementary skills Division of profits Taxation Capital Accumulation ```

Question 29

Partnership Disadvantages

Answer 29

unlimited liability of at least one partner lack of continuity difficulty in disposing of partnership

Question 30

Corporation

Answer 30

A separate legal entity apart from its owners which receives its right to exist from the state in which it is incorporated

Question 31

Types of Corporation

Answer 31

Business corporation (sub-chapter C corporation) Nonprofit corporation Close Corporation Professional corporation

Question 32

Certificate of Incorporation

Answer 32

``` Corporations Name Statement of purpose Time horizon names and addresses place of business capital stock authorization capital required at the time of incorporation restrictions on transferring shares ```

Question 33

Corporation Advantages

Answer 33

Limited Liability of the Stockholders | Ability to Attract capital

Question 34

Corporation Disadvantages

Answer 34

Cost and time involved in incorporation process | double taxation