Question 1

If you do not budget for unexpected expenses in a given month,you will likely experience a(n)

Accepted Answer

A) cash shortage. 
B) cash surplus. 
C) increase in assets. 
D) decrease in liabilities. 
A) cash shortage. 
B) cash surplus. 
C) increase in assets. 
D) decrease in liabilities.

Question 2

In budgeting,it is useful to compare ________ with the budgeted amounts to determine the accuracy or error of the budget and adjust it as necessary.

Accepted Answer

A) actual inflows 
B) actual outflows 
C) both actual inflows and outflows 
D) current assets 
A) actual inflows 
B) actual outflows 
C) both actual inflows and outflows 
D) current assets

Question 3

Liabilities include all of the following except

Accepted Answer

A) this year's monthly car payments on a three-year loan. 
B) the total mortgage on a home. 
C) the amount due on a credit card. 
D) the pay-off on a student loan. 
A) this year's monthly car payments on a three-year loan. 
B) the total mortgage on a home. 
C) the amount due on a credit card. 
D) the pay-off on a student loan.

Question 4

One advantage of budgeting several months in advance is that you will be warned of potential deficiencies and can determine how to cover them.

Accepted Answer

A) True 
 B)False

Question 5

Cash inflows tend to be higher for younger individuals and lower for individuals in their 50s.

Accepted Answer

A) True 
 B)False

Question 6

Bills that are to be paid off within a year are called

Accepted Answer

A) short-term liabilities. 
B) one-year liabilities. 
C) current liabilities. 
D) insignificant bills. 
A) short-term liabilities. 
B) one-year liabilities. 
C) current liabilities. 
D) insignificant bills.

Question 7

Judy has cash inflows of $3,000 for the month of June.Her expenses or cash outflows were $4,000.What is her net cash flow? List two options for Judy to meet her financial obligations in June.What is the effect (increase or decrease)of these options on her assets and liabilities?

Accepted Answer

Net cash flow is a negative $1

Question 8

Many individuals tend to ________ their cash inflows and ________ their outflows.

Accepted Answer

A) underestimate; overestimate 
B) overestimate; underestimate 
C) minimize; maximize 
D) not know; accurately know 
A) underestimate; overestimate 
B) overestimate; underestimate 
C) minimize; maximize 
D) not know; accurately know

Question 9

If your cash outflows are $600 and your cash inflows are $1,000,you can increase your net worth by:
(a)$1,000.
(b)$600.
(c)$1,600.
(d)$400.

Accepted Answer

(d)$1,000

Question 10

Which of the following is not a cash outflow?

Accepted Answer

A) Salary 
B) Rent 
C) Telephone bill 
D) Car payment 
A) Salary 
B) Rent 
C) Telephone bill 
D) Car payment

Question 11

If both a husband and wife are employed,their consumption behavior will

Accepted Answer

A) increase. 
B) decrease. 
C) stay the same. 
D) None of the above; the employment of spouses is unrelated to consumption behavior. 
A) increase. 
B) decrease. 
C) stay the same. 
D) None of the above; the employment of spouses is unrelated to consumption behavior.

Question 12

If you prepare a document that shows your cash inflows and cash outflows it is called a(n)________.

Accepted Answer

personal c

Question 13

The net worth of an individual or family can be increased by

Accepted Answer

A) increasing spending. 
B) increasing liabilities. 
C) decreasing assets. 
D) increasing income. 
A) increasing spending. 
B) increasing liabilities. 
C) decreasing assets. 
D) increasing income.

Question 14

The difference between assets and liabilities is called

Accepted Answer

A) surplus. 
B) deficit. 
C) net income. 
D) net worth. 
A) surplus. 
B) deficit. 
C) net income. 
D) net worth.

Question 15

Which of the following usually affects cash inflows the most?

Accepted Answer

A) The education and income of your parents 
B) Your job skills 
C) Your personal consumption behavior 
D) The size of your family 
A) The education and income of your parents 
B) Your job skills 
C) Your personal consumption behavior 
D) The size of your family

Question 16

The cash flow statement reports a person's or family's

Accepted Answer

A) net worth. 
B) current income and payments. 
C) plan for borrowing. 
D) value of investments. 
A) net worth. 
B) current income and payments. 
C) plan for borrowing. 
D) value of investments.

Question 17

Property such as a person's home,car,and furniture is called

Accepted Answer

A) liquid assets. 
B) household assets. 
C) major property assets. 
D) investment assets. 
A) liquid assets. 
B) household assets. 
C) major property assets. 
D) investment assets.

Question 18

If you have current assets of $20,000 and current liabilities of $10,000,then you
(a)have a current liquidity ratio of 2.
(b)are in poor shape with a liquidity ratio of 0.5.
(c)may have trouble paying your bills depending on their due dates.
(d)are overextended by $10,000

Accepted Answer

(a)$20,000

Question 19

Getting financial help from family and friends is easy and should be one of your first options in case of emergencies.

Accepted Answer

A) True 
 B)False

Question 20

Some people with large incomes spend their entire paychecks within a few days,while others with small incomes may be big savers.

Accepted Answer

A) True 
 B)False

Exam 2: Planning With Personal Financial Statements

If you do not budget for unexpected expenses in a given month,you will likely experience a(n)

In budgeting,it is useful to compare ________ with the budgeted amounts to determine the accuracy or error of the budget and adjust it as necessary.

Liabilities include all of the following except

One advantage of budgeting several months in advance is that you will be warned of potential deficiencies and can determine how to cover them.

Cash inflows tend to be higher for younger individuals and lower for individuals in their 50s.

Bills that are to be paid off within a year are called

Judy has cash inflows of $3,000 for the month of June.Her expenses or cash outflows were $4,000.What is her net cash flow? List two options for Judy to meet her financial obligations in June.What is the effect (increase or decrease)of these options on her assets and liabilities?

Many individuals tend to ________ their cash inflows and ________ their outflows.

If your cash outflows are $600 and your cash inflows are $1,000,you can increase your net worth by: (a)$1,000. (b)$600. (c)$1,600. (d)$400.

Which of the following is not a cash outflow?

If both a husband and wife are employed,their consumption behavior will

If you prepare a document that shows your cash inflows and cash outflows it is called a(n)________.

The net worth of an individual or family can be increased by

The difference between assets and liabilities is called

Which of the following usually affects cash inflows the most?

The cash flow statement reports a person's or family's

Property such as a person's home,car,and furniture is called

If you have current assets of $20,000 and current liabilities of $10,000,then you (a)have a current liquidity ratio of 2. (b)are in poor shape with a liquidity ratio of 0.5. (c)may have trouble paying your bills depending on their due dates. (d)are overextended by $10,000

Getting financial help from family and friends is easy and should be one of your first options in case of emergencies.

Some people with large incomes spend their entire paychecks within a few days,while others with small incomes may be big savers.

Overview of a Financial Plan

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Many individuals tend to their cash inflows and their outflows.