Question 1

A cash flow statement uses this equation: Assets - Liabilities = Net worth.

Accepted Answer

A) True 
 B)False

Question 2

What are two methods that can make saving easier?

Accepted Answer

Three methods are identified in Chapter

Question 3

The number of personal financial records a household has to organize may seem overwhelming.How long should you keep documents relating to the purchase of real estate?

Accepted Answer

A)  Until the mortgage is paid off 
B)  Until you move out of the house 
C)  Three years 
D)  Seven years 
E)  Indefinitely 
A)  Until the mortgage is paid off 
B)  Until you move out of the house 
C)  Three years 
D)  Seven years 
E)  Indefinitely

Question 4

When creating a budget,which of the following statements is true?

Accepted Answer

A)  Include in income the bonuses and gifts you expect to receive. 
B)  It is easier to create a budget if your earnings vary. 
C)  Common financial problems can be maximized through budgeting. 
D)  Numbers in the budget are estimates. 
E)  It is better to overestimate your income for next year. 
A)  Include in income the bonuses and gifts you expect to receive. 
B)  It is easier to create a budget if your earnings vary. 
C)  Common financial problems can be maximized through budgeting. 
D)  Numbers in the budget are estimates. 
E)  It is better to overestimate your income for next year.

Question 5

Given the following information,calculate the debt ratio percentage: Liabilities = $24,500
Liquid assets = $4,900
Monthly credit payments = $800
Monthly savings = $760
Net worth = $72,500
Current liabilities = $1,600
Take-home pay = $2,300
Gross income = $3,500
Monthly expenses = $-2,040

Accepted Answer

A)  33.79 
B)  -3.06 
C)  2.40 
D)  34.78 
E)  -21.71 
A)  33.79 
B)  -3.06 
C)  2.40 
D)  34.78 
E)  -21.71

Question 6

Which of the following ratios shows the relationship between gross income and money saved?

Accepted Answer

A)  Debt ratio 
B)  Current ratio 
C)  Liquidity ratio 
D)  Debt payments ratio 
E)  Savings ratio 
A)  Debt ratio 
B)  Current ratio 
C)  Liquidity ratio 
D)  Debt payments ratio 
E)  Savings ratio

Question 7

When creating a budget,it is important to save the amount you have left at the end of the month.

Accepted Answer

A) True 
 B)False

Question 8

Financial experts recommend a debt/payments ratio of less than ____ of take-home pay.

Accepted Answer

A)  0% 
B)  5-10% 
C)  20% 
D)  25-35% 
E)  50% 
A)  0% 
B)  5-10% 
C)  20% 
D)  25-35% 
E)  50%

Question 9

Which of the following is NOT a main purpose of a budget?

Accepted Answer

A)  Help to live within your income 
B)  Spend your money without care 
C)  Reach financial goals 
D)  Prepare for financial emergencies 
E)  Develop wise financial management habits 
A)  Help to live within your income 
B)  Spend your money without care 
C)  Reach financial goals 
D)  Prepare for financial emergencies 
E)  Develop wise financial management habits

Question 10

Another name for a statement of financial position is a

Accepted Answer

A)  Balance sheet. 
B)  Bank statement. 
C)  Budget. 
D)  Cash flow statement. 
E)  Time value of money report. 
A)  Balance sheet. 
B)  Bank statement. 
C)  Budget. 
D)  Cash flow statement. 
E)  Time value of money report.

Question 11

Given the following information,calculate total assets:

Accepted Answer

@#IMG-DLM& $196,100
Feedback: Total asse

Question 12

Financial experts recommend a monthly savings ratio of at least ____ of gross income.

Accepted Answer

A)  0% 
B)  5-10% 
C)  20% 
D)  25-35% 
E)  50% 
A)  0% 
B)  5-10% 
C)  20% 
D)  25-35% 
E)  50%

Question 13

When creating a personal balance sheet,which of the following is a current liability?

Accepted Answer

A)  Checking account 
B)  Net worth 
C)  Student loan 
D)  Money your sister owes you in two years 
E)  Charge account balance 
A)  Checking account 
B)  Net worth 
C)  Student loan 
D)  Money your sister owes you in two years 
E)  Charge account balance

Question 14

Which of the following financial documents would most likely be stored in a safe deposit box?

Accepted Answer

A)  W-2 forms 
B)  Personal financial statements 
C)  Warranties 
D)  Marriage certificates 
E)  Checking account statements 
A)  W-2 forms 
B)  Personal financial statements 
C)  Warranties 
D)  Marriage certificates 
E)  Checking account statements

Question 15

When creating a budget,it is important to

Accepted Answer

A)  Save the amount you have left at the end of the month. 
B)  Set aside savings after your variable expenses are paid. 
C)  Save an amount no more than 3% of your annual income in an emergency fund. 
D)  Spend the amount of money you have budgeted in each category. 
E)  "Pay yourself first" by setting aside savings before other expenses are budgeted. 
A)  Save the amount you have left at the end of the month. 
B)  Set aside savings after your variable expenses are paid. 
C)  Save an amount no more than 3% of your annual income in an emergency fund. 
D)  Spend the amount of money you have budgeted in each category. 
E)  "Pay yourself first" by setting aside savings before other expenses are budgeted.

Question 16

The document that would be most useful to track planned spending patterns for the next month is the

Accepted Answer

A)  Balance sheet. 
B)  Cash flow statement. 
C)  Budget. 
D)  All of these. 
E)  None of these. 
A)  Balance sheet. 
B)  Cash flow statement. 
C)  Budget. 
D)  All of these. 
E)  None of these.

Question 17

All of the following are fixed expenses except a(n)

Accepted Answer

A)  Mortgage payment. 
B)  Installment loan payment. 
C)  Monthly bus pass. 
D)  Allocation for life insurance. 
E)  Electric bill. 
A)  Mortgage payment. 
B)  Installment loan payment. 
C)  Monthly bus pass. 
D)  Allocation for life insurance. 
E)  Electric bill.

Question 18

A cash flow statement uses this equation: Total cash received during the time period - Cash outflows during the time period = Cash surplus (deficit).

Accepted Answer

A) True 
 B)False

Question 19

A current ratio of 2 means

Accepted Answer

A)  2% from each paycheck is available for savings. 
B)  The minimum payment for a credit card is 2% of the balance. 
C)  2 months of living expenses are available in case of emergency. 
D)  Net worth equals 2 times the amount of debt. 
E)  $2 of liquid assets are available for every $1 in current liabilities. 
A)  2% from each paycheck is available for savings. 
B)  The minimum payment for a credit card is 2% of the balance. 
C)  2 months of living expenses are available in case of emergency. 
D)  Net worth equals 2 times the amount of debt. 
E)  $2 of liquid assets are available for every $1 in current liabilities.

Question 20

Programs are available to help low-income older or disabled people who have difficulty budgeting.

Accepted Answer

A) True 
 B)False

A cash flow statement uses this equation: Assets - Liabilities = Net worth.

What are two methods that can make saving easier?

The number of personal financial records a household has to organize may seem overwhelming.How long should you keep documents relating to the purchase of real estate?

When creating a budget,which of the following statements is true?

Given the following information,calculate the debt ratio percentage: Liabilities = $24,500 Liquid assets = $4,900 Monthly credit payments = $800 Monthly savings = $760 Net worth = $72,500 Current liabilities = $1,600 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $-2,040

Which of the following ratios shows the relationship between gross income and money saved?

When creating a budget,it is important to save the amount you have left at the end of the month.

Financial experts recommend a debt/payments ratio of less than ____ of take-home pay.

Which of the following is NOT a main purpose of a budget?

Another name for a statement of financial position is a

Given the following information,calculate total assets:

Financial experts recommend a monthly savings ratio of at least ____ of gross income.

When creating a personal balance sheet,which of the following is a current liability?

Which of the following financial documents would most likely be stored in a safe deposit box?

When creating a budget,it is important to

The document that would be most useful to track planned spending patterns for the next month is the

All of the following are fixed expenses except a(n)

A cash flow statement uses this equation: Total cash received during the time period - Cash outflows during the time period = Cash surplus (deficit).

A current ratio of 2 means

Programs are available to help low-income older or disabled people who have difficulty budgeting.

Personal Financial Planning in Action

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters

Exam 2: Money Management Skills

A cash flow statement uses this equation: Assets - Liabilities = Net worth.

What are two methods that can make saving easier?

The number of personal financial records a household has to organize may seem overwhelming.How long should you keep documents relating to the purchase of real estate?

When creating a budget,which of the following statements is true?

Given the following information,calculate the debt ratio percentage: Liabilities = $24,500 Liquid assets = $4,900 Monthly credit payments = $800 Monthly savings = $760 Net worth = $72,500 Current liabilities = $1,600 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $-2,040

Which of the following ratios shows the relationship between gross income and money saved?

When creating a budget,it is important to save the amount you have left at the end of the month.

Financial experts recommend a debt/payments ratio of less than ____ of take-home pay.

Which of the following is NOT a main purpose of a budget?

Another name for a statement of financial position is a

Given the following information,calculate total assets:

Financial experts recommend a monthly savings ratio of at least ____ of gross income.

When creating a personal balance sheet,which of the following is a current liability?

Which of the following financial documents would most likely be stored in a safe deposit box?

When creating a budget,it is important to

The document that would be most useful to track planned spending patterns for the next month is the

All of the following are fixed expenses except a(n)

A cash flow statement uses this equation: Total cash received during the time period - Cash outflows during the time period = Cash surplus (deficit).

A current ratio of 2 means

Programs are available to help low-income older or disabled people who have difficulty budgeting.

Personal Financial Planning in Action

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters