Farm and Ranch Management Exam 2
questions n answers
Chart of Accounts - correct answer ✔✔a list of all accounts used by a business
Purpose of chart of accounts - correct answer ✔✔organize all accounts into manageable
categories
Cash Accounting - correct answer ✔✔Revenue and expenses are recognized at the time the
business receives the cash or pays a bill
Accrual Accounting - correct answer ✔✔Revenue and expenses are recognized at the time they
are earned or incurred, whether or not cash changes hands
Single Entry Accounting - correct answer ✔✔Type of accounting where each transaction is
entered only once in the account books. It is not self-balancing; in other words, it does not rely
on equal debits or credits.
Double-Entry Accounting - correct answer ✔✔Accounting system in which each transaction
affects at least two accounts and has at least one debit and one credit.
Whole Farm Accounting - correct answer ✔✔Grouping the entire farm's production into one
summarized record system
Enterprise Accounting - correct answer ✔✔Divides business/operation into individual
enterprises, helps identify areas that are performing well and poorly
, Complete Accounting - correct answer ✔✔computerized accounting, uses either cash or accrual
accounting, accrual is default
Basic Accounting - correct answer ✔✔Manual method of accounting, written on paper, ONLY
use CASH accounting
Accounts Payable (A/P) - correct answer ✔✔any expense that you have incurred but have yet to
pay for
Accounts Receivable (A/R) - correct answer ✔✔revenue for a product or service that has been
rendered, you have NOT received payment for
Accrued Expenses - correct answer ✔✔expenses that accrue or accumulate on a daily basis but
aren't paid yet due to a future due date.
Asset - correct answer ✔✔any tangible item or financial resource that has value
Liabilities - correct answer ✔✔a debt or other financial obligation that must be paid in the
future
Expenses - correct answer ✔✔a cost or expenditure incurred in the production of revenue
Inventory - correct answer ✔✔the physical quantity or financial value of products produced for
sale that have yet to be sold.
Net Farm Income - correct answer ✔✔revenue - expenses
questions n answers
Chart of Accounts - correct answer ✔✔a list of all accounts used by a business
Purpose of chart of accounts - correct answer ✔✔organize all accounts into manageable
categories
Cash Accounting - correct answer ✔✔Revenue and expenses are recognized at the time the
business receives the cash or pays a bill
Accrual Accounting - correct answer ✔✔Revenue and expenses are recognized at the time they
are earned or incurred, whether or not cash changes hands
Single Entry Accounting - correct answer ✔✔Type of accounting where each transaction is
entered only once in the account books. It is not self-balancing; in other words, it does not rely
on equal debits or credits.
Double-Entry Accounting - correct answer ✔✔Accounting system in which each transaction
affects at least two accounts and has at least one debit and one credit.
Whole Farm Accounting - correct answer ✔✔Grouping the entire farm's production into one
summarized record system
Enterprise Accounting - correct answer ✔✔Divides business/operation into individual
enterprises, helps identify areas that are performing well and poorly
, Complete Accounting - correct answer ✔✔computerized accounting, uses either cash or accrual
accounting, accrual is default
Basic Accounting - correct answer ✔✔Manual method of accounting, written on paper, ONLY
use CASH accounting
Accounts Payable (A/P) - correct answer ✔✔any expense that you have incurred but have yet to
pay for
Accounts Receivable (A/R) - correct answer ✔✔revenue for a product or service that has been
rendered, you have NOT received payment for
Accrued Expenses - correct answer ✔✔expenses that accrue or accumulate on a daily basis but
aren't paid yet due to a future due date.
Asset - correct answer ✔✔any tangible item or financial resource that has value
Liabilities - correct answer ✔✔a debt or other financial obligation that must be paid in the
future
Expenses - correct answer ✔✔a cost or expenditure incurred in the production of revenue
Inventory - correct answer ✔✔the physical quantity or financial value of products produced for
sale that have yet to be sold.
Net Farm Income - correct answer ✔✔revenue - expenses
