Question 1

Net worth is the amount owed to others.

Accepted Answer

A) True 
 B)False

Question 2

Items with monetary value are referred to as

Accepted Answer

A)  Liabilities. 
B)  Variable expenses. 
C)  Net worth. 
D)  Income. 
E)  Assets. 
A)  Liabilities. 
B)  Variable expenses. 
C)  Net worth. 
D)  Income. 
E)  Assets.

Question 3

A debt ratio of 0.5 indicates

Accepted Answer

A)  The balance on the mortgage = 50% of the value of the home. 
B)  For every dollar of net worth, debt equals $0.50. 
C)  For every dollar of debt, net worth equals $0.50. 
D)  For every dollar of take-home pay, monthly credit payments equal $0.50. 
E)  For every dollar of assets, monthly credit payments equal $0.50. 
A)  The balance on the mortgage = 50% of the value of the home. 
B)  For every dollar of net worth, debt equals $0.50. 
C)  For every dollar of debt, net worth equals $0.50. 
D)  For every dollar of take-home pay, monthly credit payments equal $0.50. 
E)  For every dollar of assets, monthly credit payments equal $0.50.

Question 4

A budget deficit would result when a person's or family's

Accepted Answer

A)  Actual spending is less than planned spending. 
B)  Assets exceed liabilities. 
C)  Actual spending equals planned spending. 
D)  Actual spending exceeds planned spending. 
E)  Net worth decreases. 
A)  Actual spending is less than planned spending. 
B)  Assets exceed liabilities. 
C)  Actual spending equals planned spending. 
D)  Actual spending exceeds planned spending. 
E)  Net worth decreases.

Question 5

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 6

When completing a cash flow statement, take-home pay less deductions equals gross salary.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a deduction to determine take-home pay?

Accepted Answer

A)  Interest earned on savings 
B)  Commissions 
C)  Dividends 
D)  Salary 
E)  Social Security taxes 
A)  Interest earned on savings 
B)  Commissions 
C)  Dividends 
D)  Salary 
E)  Social Security taxes

Question 8

The main purposes of personal financial statements are to

Accepted Answer

A)  Report your current financial position. 
B)  Measure your progress toward financial goals. 
C)  Maintain information about your financial activities. 
D)  Provide data for preparing tax forms or applying for credit. 
E)  All of the above are correct 
A)  Report your current financial position. 
B)  Measure your progress toward financial goals. 
C)  Maintain information about your financial activities. 
D)  Provide data for preparing tax forms or applying for credit. 
E)  All of the above are correct

Question 9

Birth certificates, wills, and Social Security data should be kept for up to 7 years.

Accepted Answer

A) True 
 B)False

Question 10

Given the following information, calculate the debt ratio percentage: Liabilities = $25,000
Liquid assets = $5,000
Monthly credit payments = $800
Monthly savings = $760
Net worth = $75,000 Take-home pay = $2,300
Gross income = $3,500
Monthly expenses = $2,050

Accepted Answer

A)  33.33 percent 
B)  30.00 percent 
C)  3.00 percent 
D)  3.20 percent 
E)  8.20 percent 
A)  33.33 percent 
B)  30.00 percent 
C)  3.00 percent 
D)  3.20 percent 
E)  8.20 percent

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 13

The number of personal financial records a household has to organize may seem overwhelming. How long should you keep copies of your tax returns?

Accepted Answer

A)  Until you receive your refund 
B)  Until the end of the current year 
C)  Three years 
D)  Seven years 
E)  Permanently 
A)  Until you receive your refund 
B)  Until the end of the current year 
C)  Three years 
D)  Seven years 
E)  Permanently

Question 14

A budget is a record of how a person or family has spent their money.

Accepted Answer

A) True 
 B)False

Question 15

Rebecca Wilson budgeted $395 for a new wardrobe in June. She actually spent $425. What is her budget variance?

Accepted Answer

A)  $25 deficit 
B)  $30 deficit 
C)  $425 deficit 
D)  $25 surplus 
E)  $30 surplus 
A)  $25 deficit 
B)  $30 deficit 
C)  $425 deficit 
D)  $25 surplus 
E)  $30 surplus

Question 16

The current financial position of an individual or family is best presented with the use of a

Accepted Answer

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

Question 17

When creating a personal balance sheet, which of the following is an investment asset?

Accepted Answer

A)  Cash value of life insurance 
B)  Checking account 
C)  Personal possessions in your home 
D)  Retirement account 
E)  Vacation property 
A)  Cash value of life insurance 
B)  Checking account 
C)  Personal possessions in your home 
D)  Retirement account 
E)  Vacation property

Question 18

A high debt ratio is best.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following appears as a cash outflow on a cash flow statement?

Accepted Answer

A)  Liquid assets 
B)  Variable expenses 
C)  Net worth 
D)  Personal possessions 
E)  Real estate assets 
A)  Liquid assets 
B)  Variable expenses 
C)  Net worth 
D)  Personal possessions 
E)  Real estate assets

Question 20

Which of the following appears as a cash outflow on a cash flow statement?

Accepted Answer

A)  Home value 
B)  Loan payment 
C)  Net worth 
D)  Balance of mortgage 
E)  Cash value of life insurance 
A)  Home value 
B)  Loan payment 
C)  Net worth 
D)  Balance of mortgage 
E)  Cash value of life insurance

Net worth is the amount owed to others.

Items with monetary value are referred to as

A debt ratio of 0.5 indicates

A budget deficit would result when a person's or family's

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

When completing a cash flow statement, take-home pay less deductions equals gross salary.

Which of the following is a deduction to determine take-home pay?

The main purposes of personal financial statements are to

Birth certificates, wills, and Social Security data should be kept for up to 7 years.

Given the following information, calculate the debt ratio percentage: Liabilities = $25,000 Liquid assets = $5,000 Monthly credit payments = $800 Monthly savings = $760 Net worth = $75,000 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $2,050

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

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

The number of personal financial records a household has to organize may seem overwhelming. How long should you keep copies of your tax returns?

A budget is a record of how a person or family has spent their money.

Rebecca Wilson budgeted $395 for a new wardrobe in June. She actually spent $425. What is her budget variance?

The current financial position of an individual or family is best presented with the use of a

When creating a personal balance sheet, which of the following is an investment asset?

A high debt ratio is best.

Which of the following appears as a cash outflow on a cash flow statement?

Which of the following appears as a cash outflow on a cash flow statement?

Personal Financial Planning in Action

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 2: Money Management Skills

Net worth is the amount owed to others.

Items with monetary value are referred to as

A debt ratio of 0.5 indicates

A budget deficit would result when a person's or family's

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

When completing a cash flow statement, take-home pay less deductions equals gross salary.

Which of the following is a deduction to determine take-home pay?

The main purposes of personal financial statements are to

Birth certificates, wills, and Social Security data should be kept for up to 7 years.

Given the following information, calculate the debt ratio percentage: Liabilities = $25,000 Liquid assets = $5,000 Monthly credit payments = $800 Monthly savings = $760 Net worth = $75,000 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $2,050

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

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

The number of personal financial records a household has to organize may seem overwhelming. How long should you keep copies of your tax returns?

A budget is a record of how a person or family has spent their money.

Rebecca Wilson budgeted $395 for a new wardrobe in June. She actually spent $425. What is her budget variance?

The current financial position of an individual or family is best presented with the use of a

When creating a personal balance sheet, which of the following is an investment asset?

A high debt ratio is best.

Which of the following appears as a cash outflow on a cash flow statement?

Which of the following appears as a cash outflow on a cash flow statement?

Personal Financial Planning in Action

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters