Question 1

Which of the following would be considered a long-term liability?

Accepted Answer

A) Charge account 
B) Mortgage 
C) Six month cash loan 
D) Tax payment 
E) Insurance premium 
A) Charge account 
B) Mortgage 
C) Six month cash loan 
D) Tax payment 
E) Insurance premium B

Question 2

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due within one year?

Accepted Answer

A) Budget variance 
B) Investment assets 
C) Long-term liabilities 
D) Current assets 
E) Current liabilities 
A) Budget variance 
B) Investment assets 
C) Long-term liabilities 
D) Current assets 
E) Current liabilities E

Question 3

The value of the home you own would be included in which section of your balance sheet?

Accepted Answer

A) Liquid assets 
B) Investment assets 
C) Real estate assets 
D) Personal possessions 
E) Current liabilities 
A) Liquid assets 
B) Investment assets 
C) Real estate assets 
D) Personal possessions 
E) Current liabilities C

Question 4

A personal balance sheet:

Accepted Answer

A) predicts income and expenses. 
B) reports what an individual or a family owns and owes. 
C) reports income and expenses for an individual or a family. 
D) predicts investment success. 
E) analyzes debt payment activities. 
A) predicts income and expenses. 
B) reports what an individual or a family owns and owes. 
C) reports income and expenses for an individual or a family. 
D) predicts investment success. 
E) analyzes debt payment activities.

Question 5

Which of the following would be considered a fixed expense?

Accepted Answer

A) Electric bill 
B) Food at home 
C) Rent 
D) Donations 
E) Medical expenses 
A) Electric bill 
B) Food at home 
C) Rent 
D) Donations 
E) Medical expenses

Question 6

Patricia McDonald has determined that the value of her liquid assets is $4,500,the value of her real estate is $135,000,the value of her personal possessions is $58,000,and the value of her investment assets is $72,000.She has also determined the value of her current liabilities is $7,500 and the value of her long term liabilities is $98,000.What is Patricia's net worth?

Accepted Answer

A) $269,500 
B) $105,500 
C) $164,000 
D) $205,500 
E) $132,000 
A) $269,500 
B) $105,500 
C) $164,000 
D) $205,500 
E) $132,000

Question 7

Chris Carter needs to store monthly statements from his bank,his credit card company and his savings accounts.Where is the most appropriate place for Chris to store this information?

Accepted Answer

A) Home file 
B) Safe deposit box 
C) File at work 
D) Best friend's house 
E) No storage needed 
A) Home file 
B) Safe deposit box 
C) File at work 
D) Best friend's house 
E) No storage needed

Question 8

A person's net worth would increase as a result of:

Accepted Answer

A) reducing the amounts you owe to others. 
B) decreasing savings. 
C) increasing spending for current living expenses. 
D) decreasing the value of personal possessions. 
E) decreasing the value of investments. 
A) reducing the amounts you owe to others. 
B) decreasing savings. 
C) increasing spending for current living expenses. 
D) decreasing the value of personal possessions. 
E) decreasing the value of investments.

Question 9

In order to calculate a person's savings ratio,the amount saved each month is divided by net income.

Accepted Answer

A) True 
 B)False

Question 10

Catherine Jones has determined the following information about her own financial situation.Her checking account is worth $850 and her savings account is worth $1,200.She owns her own home that has a market value of $119,000.She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300.She has a car worth $12,500.She has recently purchased a mutual fund worth $5,500 and she has a retirement account worth $38,550.What is the value of her real estate assets?

Accepted Answer

A) $2,050 
B) $119,000 
C) $27,800 
D) $44,050 
E) $171,900 
A) $2,050 
B) $119,000 
C) $27,800 
D) $44,050 
E) $171,900

Question 11

Liquid assets refer to:

Accepted Answer

A) amounts that must be paid soon. 
B) cash and items of value that can be easily converted to cash. 
C) total income available to a family for spending. 
D) the value of investments. 
E) amounts on which taxes must be paid. 
A) amounts that must be paid soon. 
B) cash and items of value that can be easily converted to cash. 
C) total income available to a family for spending. 
D) the value of investments. 
E) amounts on which taxes must be paid.

Question 12

Current liabilities differ from long-term liabilities based on:

Accepted Answer

A) the amount owed. 
B) the financial situation of the creditor. 
C) the interest rate charged. 
D) when the debt is due. 
E) current economic conditions. 
A) the amount owed. 
B) the financial situation of the creditor. 
C) the interest rate charged. 
D) when the debt is due. 
E) current economic conditions.

Question 13

Financial payments that do not vary from month to month are referred to as variable expenses.

Accepted Answer

A) True 
 B)False

Question 14

One of the main purposes of a budget is to help you:

Accepted Answer

A) Live within your income. 
B) Spend your money quickly. 
C) Reach your career goals. 
D) Prepare for financial non-emergencies. 
E) Develop spontaneous financial management habits. 
A) Live within your income. 
B) Spend your money quickly. 
C) Reach your career goals. 
D) Prepare for financial non-emergencies. 
E) Develop spontaneous financial management habits.

Question 15

Karen Phillips has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes.This would be an example of:

Accepted Answer

A) money management. 
B) opportunity cost analysis. 
C) a personal balance sheet. 
D) a liquidation exercise. 
E) a budget variance. 
A) money management. 
B) opportunity cost analysis. 
C) a personal balance sheet. 
D) a liquidation exercise. 
E) a budget variance.

Question 16

Opportunity costs are only associated with money management decisions involving long-term financial security.

Accepted Answer

A) True 
 B)False

Question 17

A personal balance sheet presents:

Accepted Answer

A) amounts budgeted for spending. 
B) income and expenses for a period of time. 
C) earnings on savings and investments. 
D) items you own and amounts you owe. 
E) family financial goals. 
A) amounts budgeted for spending. 
B) income and expenses for a period of time. 
C) earnings on savings and investments. 
D) items you own and amounts you owe. 
E) family financial goals.

Question 18

Which one of the following is the best example of a long-term goal for a married couple with no children?

Accepted Answer

A) Buy a new car 
B) Increase life insurance 
C) Increase savings 
D) Provide for retirement income 
E) Complete college 
A) Buy a new car 
B) Increase life insurance 
C) Increase savings 
D) Provide for retirement income 
E) Complete college

Question 19

Jeff Willis has a budget that he follows each month.He has used spreadsheet software to help him determine what he wants to spend each month.At the end of the month,the spreadsheet software automatically compares what he budgeted with what he spent.Jeff can also graph these results if he wants to.What type of budget has Jeff created?

Accepted Answer

A) Mental budget 
B) Physical budget 
C) Written budget 
D) Computerized budget 
E) None of these 
A) Mental budget 
B) Physical budget 
C) Written budget 
D) Computerized budget 
E) None of these

Question 20

Insolvency occurs when liabilities far exceed available assets.

Accepted Answer

A) True 
 B)False

Which of the following would be considered a long-term liability?

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due within one year?

The value of the home you own would be included in which section of your balance sheet?

A personal balance sheet:

Which of the following would be considered a fixed expense?

Chris Carter needs to store monthly statements from his bank,his credit card company and his savings accounts.Where is the most appropriate place for Chris to store this information?

A person's net worth would increase as a result of:

In order to calculate a person's savings ratio,the amount saved each month is divided by net income.

Liquid assets refer to:

Current liabilities differ from long-term liabilities based on:

Financial payments that do not vary from month to month are referred to as variable expenses.

One of the main purposes of a budget is to help you:

Karen Phillips has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes.This would be an example of:

Opportunity costs are only associated with money management decisions involving long-term financial security.

A personal balance sheet presents:

Which one of the following is the best example of a long-term goal for a married couple with no children?

Insolvency occurs when liabilities far exceed available assets.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters

Exam 3: Money Management Strategy: Financial Statements and Budgeting

Which of the following would be considered a long-term liability?

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due within one year?

The value of the home you own would be included in which section of your balance sheet?

A personal balance sheet:

Which of the following would be considered a fixed expense?

Chris Carter needs to store monthly statements from his bank,his credit card company and his savings accounts.Where is the most appropriate place for Chris to store this information?

A person's net worth would increase as a result of:

In order to calculate a person's savings ratio,the amount saved each month is divided by net income.

Liquid assets refer to:

Current liabilities differ from long-term liabilities based on:

Financial payments that do not vary from month to month are referred to as variable expenses.

One of the main purposes of a budget is to help you:

Karen Phillips has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes.This would be an example of:

Opportunity costs are only associated with money management decisions involving long-term financial security.

A personal balance sheet presents:

Which one of the following is the best example of a long-term goal for a married couple with no children?

Insolvency occurs when liabilities far exceed available assets.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters