Question 1

Which of the following would be included on a personal income statement?

Accepted Answer

A)  Your 401K balance 
B)  Buying a flat-screen TV on credit 
C)  Making a payment to your credit card company 
D)  All of the above 
A)  Your 401K balance 
B)  Buying a flat-screen TV on credit 
C)  Making a payment to your credit card company 
D)  All of the above C

Question 2

An income statement tracks the amount of money you have coming in and going out over some period of time, like a month or a year.

Accepted Answer

A) True 
 B)False  True

Question 3

Net income is used in calculating one's networth.

Accepted Answer

A) True 
 B)False  False

Question 4

Describe an income statement and its functions.

Accepted Answer

An income statement consists of three pa

Question 5

An expenditure over which you have control, are not obligated to make, and may vary from month to month is call a ________ expenditure.

Accepted Answer

A)  fixed 
B)  variable 
C)  liquid 
D)  vacillating 
E)  none of the above 
A)  fixed 
B)  variable 
C)  liquid 
D)  vacillating 
E)  none of the above

Question 6

Claudia has $4,500 automatically deducted for insurance from her annual salary of $60,000. Additionally $7,500 is deducted each year in taxes. When preparing her personal income statement, what figure should Claudia enter for her income?

Accepted Answer

A)  $55,500 
B)  $48,000 
C)  $52,500 
D)  $60,000 
A)  $55,500 
B)  $48,000 
C)  $52,500 
D)  $60,000

Question 7

What would happen to your net worth if your sold a tangible asset you owned for $1,000 and used the money to pay off your credit card balance for $1,000?

Accepted Answer

A)  Since your liabilities decreased, your net worth would increase by $1,000. 
B)  Since your assets decreased, your net worth would decrease by $1,000. 
C)  Your net worth would increase by $500. 
D)  Your net worth would remain the same. 
A)  Since your liabilities decreased, your net worth would increase by $1,000. 
B)  Since your assets decreased, your net worth would decrease by $1,000. 
C)  Your net worth would increase by $500. 
D)  Your net worth would remain the same.

Question 8

Which questions do financial ratios help you answer?

Accepted Answer

A)  Do I have adequate liquidity to meet emergencies? 
B)  Do I have the ability to meet my debt obligations? 
C)  Am I saving as much as I think I am? 
D)  all of the above 
E)  only A and B above 
A)  Do I have adequate liquidity to meet emergencies? 
B)  Do I have the ability to meet my debt obligations? 
C)  Am I saving as much as I think I am? 
D)  all of the above 
E)  only A and B above

Question 9

Jorge currently has a debt ratio of 37 percent and Jose's is 102 percent. They both have the same take home pay every month. How can we describe their current financial situation?

Accepted Answer

A)  Jorge is currently solvent. 
B)  Jose is currently insolvent. 
C)  Jorge probably has more money available to enjoy every month. 
D)  Jose probably doesn't have much money available to enjoy every month. 
E)  All of the above are true based on their ratios. 
A)  Jorge is currently solvent. 
B)  Jose is currently insolvent. 
C)  Jorge probably has more money available to enjoy every month. 
D)  Jose probably doesn't have much money available to enjoy every month. 
E)  All of the above are true based on their ratios.

Question 10

The common thread among investment assets is

Accepted Answer

A)  they are purchased for the purpose of generating wealth. 
B)  they are purchased for one's personal use, like a vehicle or residence. 
C)  they provide the necessary liquidity in case of an emergency. 
D)  they must be easily turned into cash with little or no loss in value. 
A)  they are purchased for the purpose of generating wealth. 
B)  they are purchased for one's personal use, like a vehicle or residence. 
C)  they provide the necessary liquidity in case of an emergency. 
D)  they must be easily turned into cash with little or no loss in value.

Question 11

A statement that records where your money has come from and where it has gone over some period of time is called a(n)

Accepted Answer

A)  income statement. 
B)  balance sheet. 
C)  statement of net worth. 
D)  none of the above 
A)  income statement. 
B)  balance sheet. 
C)  statement of net worth. 
D)  none of the above

Question 12

Your net worth, or your general level of financial worth, is found by

Accepted Answer

A)  subtracting your expenses from your income. 
B)  dividing your monetary assets by your current liabilities. 
C)  subtracting your liabilities from your assets. 
D)  dividing monthly debt (less mortgage payment) by monthly income. 
E)  subtracting current liabilities from monetary assets. 
A)  subtracting your expenses from your income. 
B)  dividing your monetary assets by your current liabilities. 
C)  subtracting your liabilities from your assets. 
D)  dividing monthly debt (less mortgage payment) by monthly income. 
E)  subtracting current liabilities from monetary assets.

Question 13

Alysha currently has $500 in monetary assets and currently has $5000 in current liabilities. What is her current ratio now?

Accepted Answer

A)  .100 percent 
B)  .10 times 
C)  100 percent 
D)  10 times 
A)  .100 percent 
B)  .10 times 
C)  100 percent 
D)  10 times

Question 14

You have learned that a budget

Accepted Answer

A)  can be pretty simple or pretty sophisticated. 
B)  is a process of setting spending goals for the upcoming month or year. 
C)  is a plan for controlling cash inflows and cash outflows. 
D)  includes both actual and estimated expenses. 
E)  All of the above are true about budgets. 
A)  can be pretty simple or pretty sophisticated. 
B)  is a process of setting spending goals for the upcoming month or year. 
C)  is a plan for controlling cash inflows and cash outflows. 
D)  includes both actual and estimated expenses. 
E)  All of the above are true about budgets.

Question 15

Which of the following is a relevant question to ask a financial planner?

Accepted Answer

A)  What are your credentials and professional designations? 
B)  Would you provide us with references? 
C)  Would you show us a similar financial plan you have done for someone else? 
D)  Will you provide us with a written estimate of your services and their cost? 
E)  All of the above 
A)  What are your credentials and professional designations? 
B)  Would you provide us with references? 
C)  Would you show us a similar financial plan you have done for someone else? 
D)  Will you provide us with a written estimate of your services and their cost? 
E)  All of the above

Question 16

Explain the steps in developing a cash budget.

Accepted Answer

First, determine your anticipated income

Question 17

How do you calculate the current ratio, debt ratio, and savings ratio?

Accepted Answer

Current ratio is calculated by dividing

Question 18

George and Betty, a middle-aged couple, have watched their savings account dwindle over the years. They both make good incomes and can't understand why they aren't saving more each month. Below is their financial information to complete an income statement.
Gross monthly income: $8,000
Income taxes withheld monthly: $2,300
Monthly interest income from investments: $100
Monthly insurance payments: $700
Monthly housing expenses: $4,500
Monthly food expenses: $800
Miscellaneous expenses: $400
-George and Betty ask you for financial advice. What would you tell them to do?

Accepted Answer

A)  They should hire a Certified Financial Planner to assist them. 
B)  Nothing. With their income they are in good shape financially. 
C)  They need to live within their means. 
D)  Both A and C would be good advice for them. 
A)  They should hire a Certified Financial Planner to assist them. 
B)  Nothing. With their income they are in good shape financially. 
C)  They need to live within their means. 
D)  Both A and C would be good advice for them.

Question 19

What questions do financial ratios help answer?

Accepted Answer

By calculating your current ratio you ca

Question 20

The house that you are leasing from the landlord is a good example of a tangible asset that you would list on your balance sheet.

Accepted Answer

A) True 
 B)False

Which of the following would be included on a personal income statement?

An income statement tracks the amount of money you have coming in and going out over some period of time, like a month or a year.

Net income is used in calculating one's networth.

Describe an income statement and its functions.

An expenditure over which you have control, are not obligated to make, and may vary from month to month is call a ________ expenditure.

Claudia has $4,500 automatically deducted for insurance from her annual salary of $60,000. Additionally $7,500 is deducted each year in taxes. When preparing her personal income statement, what figure should Claudia enter for her income?

What would happen to your net worth if your sold a tangible asset you owned for $1,000 and used the money to pay off your credit card balance for $1,000?

Which questions do financial ratios help you answer?

Jorge currently has a debt ratio of 37 percent and Jose's is 102 percent. They both have the same take home pay every month. How can we describe their current financial situation?

The common thread among investment assets is

A statement that records where your money has come from and where it has gone over some period of time is called a(n)

Your net worth, or your general level of financial worth, is found by

Alysha currently has $500 in monetary assets and currently has $5000 in current liabilities. What is her current ratio now?

You have learned that a budget

Which of the following is a relevant question to ask a financial planner?

Explain the steps in developing a cash budget.

How do you calculate the current ratio, debt ratio, and savings ratio?

What questions do financial ratios help answer?

The house that you are leasing from the landlord is a good example of a tangible asset that you would list on your balance sheet.

The Financial Planning Process

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 2: Measuring Your Financial Health and Making a Plan

Which of the following would be included on a personal income statement?

An income statement tracks the amount of money you have coming in and going out over some period of time, like a month or a year.

Net income is used in calculating one's networth.

Describe an income statement and its functions.

An expenditure over which you have control, are not obligated to make, and may vary from month to month is call a ________ expenditure.

Claudia has $4,500 automatically deducted for insurance from her annual salary of $60,000. Additionally $7,500 is deducted each year in taxes. When preparing her personal income statement, what figure should Claudia enter for her income?

What would happen to your net worth if your sold a tangible asset you owned for $1,000 and used the money to pay off your credit card balance for $1,000?

Which questions do financial ratios help you answer?

Jorge currently has a debt ratio of 37 percent and Jose's is 102 percent. They both have the same take home pay every month. How can we describe their current financial situation?

The common thread among investment assets is

A statement that records where your money has come from and where it has gone over some period of time is called a(n)

Your net worth, or your general level of financial worth, is found by

Alysha currently has $500 in monetary assets and currently has $5000 in current liabilities. What is her current ratio now?

You have learned that a budget

Which of the following is a relevant question to ask a financial planner?

Explain the steps in developing a cash budget.

How do you calculate the current ratio, debt ratio, and savings ratio?

What questions do financial ratios help answer?

The house that you are leasing from the landlord is a good example of a tangible asset that you would list on your balance sheet.

The Financial Planning Process

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters