Farm and Ranch Management Exam 2
questions well answered
Income Statement is - correct answer ✔✔a summary of revenues and expenses as recorded
over a period of time
Revenue is - correct answer ✔✔should be recognized as soon as a commodity is ready for sale,
whether or not its actually sold
Gain or Loss on Sale of Capital Assets Calculation - correct answer ✔✔difference between sale
price and book value
Expense is - correct answer ✔✔all expenses incurred in producing the revenue for an
accounting period should be included
Accounts Receivable must be included as revenue when - correct answer ✔✔any change in
their value from the beginning to the end of the year
Depreciable Assets is - correct answer ✔✔the difference between the sale price and the asset's
book value
No gain or loss on an asset means - correct answer ✔✔an asset was depreciated perfectly with
its decline in market value
Gain on an asset means - correct answer ✔✔depreciated to much / depreciation expenses
where too high (market strengthened)
, Loss on an asset means - correct answer ✔✔the good lost market value faster than what was
accounted for in the depreciation / higher depreciation was needed
There will generally be a gain or loss when - correct answer ✔✔-useful lives and salvage values
are the only estimates made at the time of purchase
-the choice of depreciated method will affect the amount of annual depreciation
Properly match expenses with - correct answer ✔✔the revenue produced
Income Statement Format - correct answer ✔✔-total revenue
-minus total expenses
-equals net farm income from operations
-plus or minus gain or loss on sale of capital assets
-equals net farm income
Net Farm Income is - correct answer ✔✔the amount by which revenue exceeds expenses plus
any gain or loss on the sale of capital items
Net Farm Income represents - correct answer ✔✔the return to the operator for unpaid labor,
management and equity capital
Net Farm Income from Operations excludes - correct answer ✔✔the gain or loss on sale of
capital items
Analysis of Net Farm Income - correct answer ✔✔-rate of return on assets
-rate of return on equity
-operating profit margin ratio
-return to labor and management
questions well answered
Income Statement is - correct answer ✔✔a summary of revenues and expenses as recorded
over a period of time
Revenue is - correct answer ✔✔should be recognized as soon as a commodity is ready for sale,
whether or not its actually sold
Gain or Loss on Sale of Capital Assets Calculation - correct answer ✔✔difference between sale
price and book value
Expense is - correct answer ✔✔all expenses incurred in producing the revenue for an
accounting period should be included
Accounts Receivable must be included as revenue when - correct answer ✔✔any change in
their value from the beginning to the end of the year
Depreciable Assets is - correct answer ✔✔the difference between the sale price and the asset's
book value
No gain or loss on an asset means - correct answer ✔✔an asset was depreciated perfectly with
its decline in market value
Gain on an asset means - correct answer ✔✔depreciated to much / depreciation expenses
where too high (market strengthened)
, Loss on an asset means - correct answer ✔✔the good lost market value faster than what was
accounted for in the depreciation / higher depreciation was needed
There will generally be a gain or loss when - correct answer ✔✔-useful lives and salvage values
are the only estimates made at the time of purchase
-the choice of depreciated method will affect the amount of annual depreciation
Properly match expenses with - correct answer ✔✔the revenue produced
Income Statement Format - correct answer ✔✔-total revenue
-minus total expenses
-equals net farm income from operations
-plus or minus gain or loss on sale of capital assets
-equals net farm income
Net Farm Income is - correct answer ✔✔the amount by which revenue exceeds expenses plus
any gain or loss on the sale of capital items
Net Farm Income represents - correct answer ✔✔the return to the operator for unpaid labor,
management and equity capital
Net Farm Income from Operations excludes - correct answer ✔✔the gain or loss on sale of
capital items
Analysis of Net Farm Income - correct answer ✔✔-rate of return on assets
-rate of return on equity
-operating profit margin ratio
-return to labor and management
