Exam 2: Your Financial Statements and Plans

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Once you define your [short-term | long-term] financial goals,you can prepare a cash budget for the upcoming year.

Jacque's total monthly loan payments are $1,020 while her gross income is $3,000 per month.What is her debt service ratio?

The income and expenditures statement examines your financial

When the income statement indicates a surplus,this may be used to increase net worth by increasing assets or decreasing liabilities.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -It is most important to balance your budget over a [monthly | yearly] period.

A savings ratio expresses the

All of the following are stages in preparing a cash budget except:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -A [house | certificate of deposit] is an example of a tangible asset.

The income and expenditures statement provides a measure of financial performance over a period of time.

The Hart family spends 30 percent of their disposable income on housing,5 percent on medical expenses,25 percent on food,10 percent on clothing,14 percent on loan repayments,and 8 percent on entertainment.How much of their disposable income is available for savings and investment? (Show all work. )

When a cash surplus exists on your income and expenditure statements,you can

The main purpose of a budget is to

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -An asset must have [market | monetary] value to be included on a balance sheet.

Construct a balance sheet from the following information.Be sure the format is correct.(Show all work. )

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Your car has a market value of $10,000 while the balance of the loan against it is now $2,500.You will list this car as an asset worth [$7,500 | $10,000].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -If you pay off your debt but make no changes in your assets,your net worth will [increase | decrease].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -[Present | Future] value is the value today of an amount to be received in the future.

A budget is a detailed financial forecast.

Monthly statements and pay stubs can be shredded when year-end statements are received.

Financial planning experts recommend married couples use a money management system that includes at least 2 checking accounts.