Exam 2: Using Financial Statements and Budgets

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Net worth is highest for those about [age 65 | age 85].

A cash budget should help you to

____ would be an example of a periodic expense.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -When your liabilities exceed your assets,you are [solvent | insolvent].

You would not include ____ on an income and expenditures statement.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -It is most important to balance your budget over a [monthly | yearly] period.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A balance sheet provides a statement of your financial [position | performance].

The Wilson family's short-term goals might include

The main purpose of a budget is to

The level of the debt service ratio would indicate your ability to meet loan payments out of current income.

The income statement includes

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The purpose of the debt service ratio is to show the amount of your income needed to pay your [current liabilities | monthly loan payments].

Financial assets are intangible assets acquired to achieve long-term personal financial goals.

When estimating income for the income and expense statement,you should

Construct a balance sheet from the following information.Be sure the format is correct.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Four categories,accounting for 75% of consumer spending,include [utilities | clothing].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The total amount of salary you earn before taxes are deducted is called your [gross | net] pay.

Michael and Sandy purchased a home for $100,000 five years ago.If it appreciated 6% annually,what is it worth today?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your gross income was $32,000; your net income was $25,000; you saved $1,000.Your savings ratio was [3% | 4%].

You may be under-budgeting for food if you continually have monthly deficits in the food category.