Question 1

Another term sometimes used instead of net worth is

Accepted Answer

A) assets. 
B) net debts. 
C) long-term liabilities 
D) equity. 
E) liquid assets. 
A) assets. 
B) net debts. 
C) long-term liabilities 
D) equity. 
E) liquid assets.

Question 2

The best approach to solving the problem of an annual budget deficit is generally to

Accepted Answer

A) liquidate enough savings to make up the deficit. 
B) sell stock to make up the deficit. 
C) reduce flexible expenses. 
D) reduce fixed expenses. 
E) get a part-time job. 
A) liquidate enough savings to make up the deficit. 
B) sell stock to make up the deficit. 
C) reduce flexible expenses. 
D) reduce fixed expenses. 
E) get a part-time job.

Question 3

Theresa invested $5,000 in an account she expects will earn 7% annually.Approximately how many years will it take for the account to double in value?

Accepted Answer

A) 8 
B) 9 
C) 10 
D) 11 
E) 12 
A) 8 
B) 9 
C) 10 
D) 11 
E) 12

Question 4

If your total liquid assets equal $50,000 and your total current debts equal $15,000,your liquidity ratio is

Accepted Answer

A) 30%. 
B) 70%. 
C) 143%. 
D) 233%. 
E) 333%. 
A) 30%. 
B) 70%. 
C) 143%. 
D) 233%. 
E) 333%.

Question 5

Most types of personal property depreciate shortly after being put into use.

Accepted Answer

A) True 
 B)False

Question 6

A house and land are examples of real property.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Construct a personal balance sheet from the following information.Be sure the format is correct.(Show all work.)
 $$\begin{array} { l r } 
\text { Cash on hand } & \$ 500 \
\text { Bank credit card balance } & 750 \
\text { Taxes due } & 500 \
\text { Utility bills (over due) } & 120 \
\text { Auto loan balance } & 6,000 \
\text { Mortgage } & 45,000 \
\text { Primary residence } & 60,000 \
\text { Jewelry } & 1,200 \
\text { Stocks } & 6,000 \
\text { Coin collection } & 2,500 \
\text { 2001 Toyota } & 7,500 \
\text { Auto payment } & 250
\end{array}$$

Accepted Answer

The answer of Construct a personal balance sheet from the...

Question 9

Net worth typically peaks between the ages of 65-74 and then diminishes throughout remaining retirement years.

Accepted Answer

A) True 
 B)False

Question 10

Mike and Teresa Garza have a monthly gross income of $5,000,but they pay $1,000 per month in taxes.They also pay $2,000 per month in various loan payments.What is their debt service ratio?

Accepted Answer

A) 20% 
B) 30% 
C) 40% 
D) 50% 
E) 60% 
A) 20% 
B) 30% 
C) 40% 
D) 50% 
E) 60%

Question 11

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-Total assets on your personal balance sheet are $6,000 and liabilities are $2,000.Your solvency ratio is [67% | 33%].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

The liquidity ratio is an indicator of a family's ability to pay current debts if there is an interruption in income.

Accepted Answer

A) True 
 B)False

Question 13

Elena purchased a stamp collection for $5,000 thirty years ago.If it appreciated 8% annually,what is it worth today?

Accepted Answer

A) $17,000 
B) $36,400 
C) $50,313 
D) $123,023 
E) $150,000 
A) $17,000 
B) $36,400 
C) $50,313 
D) $123,023 
E) $150,000

Question 14

The personal balance sheet describes a family's wealth

Accepted Answer

A) at a certain point in tine. 
B) as an annual summary. 
C) as a time period less than one year. 
D) at a future time. 
E) none of these 
A) at a certain point in tine. 
B) as an annual summary. 
C) as a time period less than one year. 
D) at a future time. 
E) none of these

Question 15

____ would not be listed as a liability on your personal balance sheet.

Accepted Answer

A) Taxes owed 
B) Loan balances 
C) Bank credit card charges 
D) Savings accounts 
E) Rent due 
A) Taxes owed 
B) Loan balances 
C) Bank credit card charges 
D) Savings accounts 
E) Rent due

Question 16

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-You originally paid $6,000 for your car,which has a current market value of $4,000,and the balance of the loan against it is now $2,500.You will list this car in the assets section of your personal balance sheet at [$6,000 | $4,000].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 17

Using the future value calculations to estimate the funds needed to meet a goal takes compounding into account.

Accepted Answer

A) True 
 B)False

Question 18

The income and expense statement is a summary of actual income earned and expenses made over a specific point of time.

Accepted Answer

A) True 
 B)False

Question 19

Kim's net worth is $85,000 and her total assets are $100,000.What is Kim's solvency ratio?

Accepted Answer

A) 15% 
B) 25% 
C) 65% 
D) 85% 
E) 100% 
A) 15% 
B) 25% 
C) 65% 
D) 85% 
E) 100%

Question 20

The three parts of your personal balance sheet are

Accepted Answer

A) income, liabilities, balance. 
B) assets, expenditures, balance. 
C) assets, liabilities, balance. 
D) assets, liabilities, net worth. 
E) income, liabilities, net worth. 
A) income, liabilities, balance. 
B) assets, expenditures, balance. 
C) assets, liabilities, balance. 
D) assets, liabilities, net worth. 
E) income, liabilities, net worth.

Another term sometimes used instead of net worth is

The best approach to solving the problem of an annual budget deficit is generally to

Theresa invested $5,000 in an account she expects will earn 7% annually.Approximately how many years will it take for the account to double in value?

If your total liquid assets equal $50,000 and your total current debts equal $15,000,your liquidity ratio is

Most types of personal property depreciate shortly after being put into use.

A house and land are examples of real property.

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

Net worth typically peaks between the ages of 65-74 and then diminishes throughout remaining retirement years.

Mike and Teresa Garza have a monthly gross income of $5,000,but they pay $1,000 per month in taxes.They also pay $2,000 per month in various loan payments.What is their debt service ratio?

The liquidity ratio is an indicator of a family's ability to pay current debts if there is an interruption in income.

Elena purchased a stamp collection for $5,000 thirty years ago.If it appreciated 8% annually,what is it worth today?

The personal balance sheet describes a family's wealth

____ would not be listed as a liability on your personal balance sheet.

Using the future value calculations to estimate the funds needed to meet a goal takes compounding into account.

The income and expense statement is a summary of actual income earned and expenses made over a specific point of time.

Kim's net worth is $85,000 and her total assets are $100,000.What is Kim's solvency ratio?

The three parts of your personal balance sheet are

Understanding the Financial Planning Process

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 2: Using Financial Statements and Budgets

Another term sometimes used instead of net worth is

The best approach to solving the problem of an annual budget deficit is generally to

Theresa invested $5,000 in an account she expects will earn 7% annually.Approximately how many years will it take for the account to double in value?

If your total liquid assets equal $50,000 and your total current debts equal $15,000,your liquidity ratio is

Most types of personal property depreciate shortly after being put into use.

A house and land are examples of real property.

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

Net worth typically peaks between the ages of 65-74 and then diminishes throughout remaining retirement years.

Mike and Teresa Garza have a monthly gross income of $5,000,but they pay $1,000 per month in taxes.They also pay $2,000 per month in various loan payments.What is their debt service ratio?

The liquidity ratio is an indicator of a family's ability to pay current debts if there is an interruption in income.

Elena purchased a stamp collection for $5,000 thirty years ago.If it appreciated 8% annually,what is it worth today?

The personal balance sheet describes a family's wealth

____ would not be listed as a liability on your personal balance sheet.

Using the future value calculations to estimate the funds needed to meet a goal takes compounding into account.

The income and expense statement is a summary of actual income earned and expenses made over a specific point of time.

Kim's net worth is $85,000 and her total assets are $100,000.What is Kim's solvency ratio?

The three parts of your personal balance sheet are

Understanding the Financial Planning Process

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters