Question 1

How can an income statement help you stay solvent?

Accepted Answer

An income statement can help you stay solvent by indicating whether or not you're earning more than you spend.If you're spending too much,your income statement will show you exactly where your money is going,which will allow you to quickly spot any problem areas.If you do not spend frivolously,your income statement will indicate how much of your income is available for saving and for meeting financial goals.

Question 2

Your ________include cash,checking and savings account balances,and money market funds.

Accepted Answer

A)  monetary assets 
B)  tangible assets 
C)  physical assets 
D)  investment assets 
A)  monetary assets 
B)  tangible assets 
C)  physical assets 
D)  investment assets A

Question 3

Hector's month's living expenses covered ratio is 0.25 months.He just broke his leg and will not be able to work for six weeks.Without a paycheck for six weeks,what will Hector most likely experience?

Accepted Answer

A)  He may have to liquidate some of his tangible or investment assets to keep current on his monthly bills. 
B)  He doesn't have to worry because he has plenty of money in his savings accounts. 
C)  He may have to borrow some money to keep current on his monthly bills 
D)  There is not enough information to answer this question. 
E)  Both A and C are realistic possibilities. 
A)  He may have to liquidate some of his tangible or investment assets to keep current on his monthly bills. 
B)  He doesn't have to worry because he has plenty of money in his savings accounts. 
C)  He may have to borrow some money to keep current on his monthly bills 
D)  There is not enough information to answer this question. 
E)  Both A and C are realistic possibilities. E

Question 4

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

Accepted Answer

A)  Liability ratio 
B)  Debt ratio 
C)  Long-term debt coverage ratio 
D)  Current ratio 
E)  None of the above 
A)  Liability ratio 
B)  Debt ratio 
C)  Long-term debt coverage ratio 
D)  Current ratio 
E)  None of the above

Question 5

From her annual salary of $60,000,Claudia has $4,500 automatically deducted for insurance on an annual basis.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 6

What would happen to your net worth if you 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 7

Cameron has $17,000 in monetary assets and $4,000 in current liabilities.What is his current ratio?

Accepted Answer

A)  17,000/4,000 
B)  .535 times 
C)  5 times 
D)  13,000/4,000 
A)  17,000/4,000 
B)  .535 times 
C)  5 times 
D)  13,000/4,000

Question 8

Below are several people and their current ratios.If they were to lose their jobs today,which one would probably experience financial stress and pressures the quickest?

Accepted Answer

A)  Elmo has a current ratio of 0.5 times. 
B)  Andy has a current ratio of 2.1 times. 
C)  Dee has a current ratio of 1 time. 
D)  There is not enough information to answer this question. 
A)  Elmo has a current ratio of 0.5 times. 
B)  Andy has a current ratio of 2.1 times. 
C)  Dee has a current ratio of 1 time. 
D)  There is not enough information to answer this question.

Question 9

The experts say that,stereotypically,a fee-only financial planner is a better option than one who earns commissions on what he or she sells you.Why is this sometimes true?

Accepted Answer

Because of the agency relationship and s

Question 10

Current liabilities are those that can typically be paid off in full within 12 months.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

When including an asset such as a car on your balance sheet

Accepted Answer

A)  list its current value as indicated in a blue book or site like www.edmunds.com. 
B)  list the original purchase price of the vehicle. 
C)  list the amount it would cost to purchase a new model of this vehicle. 
D)  none of the above. 
A)  list its current value as indicated in a blue book or site like www.edmunds.com. 
B)  list the original purchase price of the vehicle. 
C)  list the amount it would cost to purchase a new model of this vehicle. 
D)  none of the above.

Question 13

An emergency fund,or rainy-day fund,is comprised of liquid assets sufficient to cover 3.5 years of expenditures.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that Jacob's assets include a motorcycle worth $12,000 and a checking account with a $3,000 balance,while his liabilities include a credit card balance of $4,000 and a motorcycle loan balance of $7,000.What is his net worth?

Accepted Answer

A)  $4,000 
B)  $5,000 
C)  $7,000 
D)  $12,000 
A)  $4,000 
B)  $5,000 
C)  $7,000 
D)  $12,000

Question 15

Suppose that Cathy's assets include an automobile worth $10,000 and a checking account with a $5,000 balance,while her liabilities include a student loan balance of $2,000 and a car loan balance of $8,000.What is her net worth?

Accepted Answer

A)  $10,000 
B)  $8,000 
C)  $5,000 
D)  $2,000 
A)  $10,000 
B)  $8,000 
C)  $5,000 
D)  $2,000

Question 16

Describe how to implement the "envelope" budgeting system.

Accepted Answer

For those new to budgeting or those with

Question 17

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)  A and B 
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)  A and B

Question 18

Which of the following financial documents would you to use to create a financial plan?

Accepted Answer

A)  Balance sheet 
B)  Income statement 
C)  Budget 
D)  Cash budget 
E)  All of the above 
A)  Balance sheet 
B)  Income statement 
C)  Budget 
D)  Cash budget 
E)  All of the above

Question 19

An expenditure that you can control over time and that you can manage is a(n)

Accepted Answer

A)  variable expenditure. 
B)  fixed expenditure. 
C)  constant expenditure. 
D)  short-term expenditure. 
E)  adjustable expenditure. 
A)  variable expenditure. 
B)  fixed expenditure. 
C)  constant expenditure. 
D)  short-term expenditure. 
E)  adjustable expenditure.

Question 20

The interest charge on your credit card statement should be listed on your personal income statement as a variable expense.

Accepted Answer

A) True 
 B)False

How can an income statement help you stay solvent?

Your ________include cash,checking and savings account balances,and money market funds.

Hector's month's living expenses covered ratio is 0.25 months.He just broke his leg and will not be able to work for six weeks.Without a paycheck for six weeks,what will Hector most likely experience?

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

From her annual salary of $60,000,Claudia has $4,500 automatically deducted for insurance on an annual basis.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 you sold a tangible asset you owned for $1,000 and used the money to pay off your credit card balance for $1,000?

Cameron has $17,000 in monetary assets and $4,000 in current liabilities.What is his current ratio?

Below are several people and their current ratios.If they were to lose their jobs today,which one would probably experience financial stress and pressures the quickest?

The experts say that,stereotypically,a fee-only financial planner is a better option than one who earns commissions on what he or she sells you.Why is this sometimes true?

Current liabilities are those that can typically be paid off in full within 12 months.

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

When including an asset such as a car on your balance sheet

An emergency fund,or rainy-day fund,is comprised of liquid assets sufficient to cover 3.5 years of expenditures.

Suppose that Jacob's assets include a motorcycle worth $12,000 and a checking account with a $3,000 balance,while his liabilities include a credit card balance of $4,000 and a motorcycle loan balance of $7,000.What is his net worth?

Suppose that Cathy's assets include an automobile worth $10,000 and a checking account with a $5,000 balance,while her liabilities include a student loan balance of $2,000 and a car loan balance of $8,000.What is her net worth?

Describe how to implement the "envelope" budgeting system.

Which questions do financial ratios help you answer?

Which of the following financial documents would you to use to create a financial plan?

An expenditure that you can control over time and that you can manage is a(n)

The interest charge on your credit card statement should be listed on your personal income statement as a variable expense.

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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

How can an income statement help you stay solvent?

Your ________include cash,checking and savings account balances,and money market funds.

Hector's month's living expenses covered ratio is 0.25 months.He just broke his leg and will not be able to work for six weeks.Without a paycheck for six weeks,what will Hector most likely experience?

Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?

From her annual salary of $60,000,Claudia has $4,500 automatically deducted for insurance on an annual basis.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 you sold a tangible asset you owned for $1,000 and used the money to pay off your credit card balance for $1,000?

Cameron has $17,000 in monetary assets and $4,000 in current liabilities.What is his current ratio?

Below are several people and their current ratios.If they were to lose their jobs today,which one would probably experience financial stress and pressures the quickest?

The experts say that,stereotypically,a fee-only financial planner is a better option than one who earns commissions on what he or she sells you.Why is this sometimes true?

Current liabilities are those that can typically be paid off in full within 12 months.

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

When including an asset such as a car on your balance sheet

An emergency fund,or rainy-day fund,is comprised of liquid assets sufficient to cover 3.5 years of expenditures.

Suppose that Jacob's assets include a motorcycle worth $12,000 and a checking account with a $3,000 balance,while his liabilities include a credit card balance of $4,000 and a motorcycle loan balance of $7,000.What is his net worth?

Suppose that Cathy's assets include an automobile worth $10,000 and a checking account with a $5,000 balance,while her liabilities include a student loan balance of $2,000 and a car loan balance of $8,000.What is her net worth?

Describe how to implement the "envelope" budgeting system.

Which questions do financial ratios help you answer?

Which of the following financial documents would you to use to create a financial plan?

An expenditure that you can control over time and that you can manage is a(n)

The interest charge on your credit card statement should be listed on your personal income statement as a variable expense.

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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