Question 1

Opportunity costs are only associated with money management decisions involving long-term financial security.

Accepted Answer

A) True 
 B)False

Question 2

About what percent of Americans have no emergency fund?

Accepted Answer

A) 5 
B) 10 
C) 25 
D) 40 
E) 50

Question 3

Which of the following would be considered a fixed expense?

Accepted Answer

A) Electric bill 
B) Food at home 
C) Rent 
D) Donations 
E) Medical expenses

Question 4

Your Aunt gives you some money for your birthday and you decide to put it into your savings account instead of spending it.The trade-off of not being able to spend the money now is an example of ________ cost.

Accepted Answer

A) fixed 
B) opportunity 
C) variable 
D) transaction 
E) total

Question 5

Liquid assets refer to:

Accepted Answer

A) amounts that must be paid soon. 
B) cash and other items that are easily converted to cash. 
C) total income available to a family for spending. 
D) the value of investments. 
E) amounts on which taxes must be paid.

Question 6

For many years,the United States has ranked highest among industrial nations in savings rate.

Accepted Answer

A) True 
 B)False

Question 7

Money management activities refer to long-term investment decisions.

Accepted Answer

A) True 
 B)False

Question 8

Total earnings of a person minus the deductions for taxes and other items is called:

Accepted Answer

A) budgeted income. 
B) gross pay. 
C) net worth. 
D) total revenue. 
E) take-home pay.

Question 9

Which of the following would be an example of a personal and employment record?

Accepted Answer

A) Budget 
B) Paycheck stub 
C) Social Security number 
D) Property tax bill 
E) Lease

Question 10

A person's net worth is computed by:

Accepted Answer

A) adding assets and liabilities. 
B) deducting current living expenses from total assets. 
C) subtracting total liabilities from total assets. 
D) subtracting assets from current liabilities. 
E) adding liabilities and budgeted expenses.

Question 11

Karen Price has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes.This would be an example of:

Accepted Answer

A) money management. 
B) opportunity cost analysis. 
C) a balance sheet. 
D) a liquidation exercise. 
E) a budget variance.

Question 12

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.

Question 13

Financial payments that do not vary from month to month are referred to as variable expenses.

Accepted Answer

A) True 
 B)False

Question 14

Insolvency is a result of having more liabilities than assets.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would most likely be classified as a current liability?

Accepted Answer

A) Monthly balance due on a credit card 
B) Total amount of a mortgage 
C) Balance of a student loan 
D) Total amount of a home improvement loan 
E) None of these

Question 16

Kathy Stumbaugh has determined that the value of her assets is $46,000 and the value of her debts is $32,000.The difference between these two is $14,000.The $14,000 could be referred to as her:

Accepted Answer

A) nest egg. 
B) total assets. 
C) adjusted assets. 
D) debt equity. 
E) net worth.

Question 17

If a family planned to spend $370 for food during March but only spent $348,this difference would be referred to as a:

Accepted Answer

A) surplus. 
B) deficit. 
C) fixed living expense. 
D) budget reduction. 
E) contribution to net worth.

Question 18

Which one of the following presents a summary of cash receipts and payments for a period of time?

Accepted Answer

A) Balance sheet 
B) Credit card statement 
C) Investment summary 
D) Cash flow statement 
E) Asset report

Question 19

Jeff Willis has a budget that he follows each month.He has used spreadsheet software to help him determine what he wants to spend each month.At the end of the month,the spreadsheet software automatically compares what he budgeted with what he spent.Jeff can also graph these results if he wants to.What type of budget has Jeff created?

Accepted Answer

A) Mental budget 
B) Physical budget 
C) Written budget 
D) Computerized budget 
E) None of these

Question 20

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due in the near future?

Accepted Answer

A) Budget variance 
B) Investment assets 
C) Long-term liabilities 
D) Current assets 
E) Current liabilities

Exam 3: Money Management Strategy: Financial Statements and Budgeting

Opportunity costs are only associated with money management decisions involving long-term financial security.

About what percent of Americans have no emergency fund?

Which of the following would be considered a fixed expense?

Your Aunt gives you some money for your birthday and you decide to put it into your savings account instead of spending it.The trade-off of not being able to spend the money now is an example of ________ cost.

Liquid assets refer to:

For many years,the United States has ranked highest among industrial nations in savings rate.

Money management activities refer to long-term investment decisions.

Total earnings of a person minus the deductions for taxes and other items is called:

Which of the following would be an example of a personal and employment record?

A person's net worth is computed by:

Karen Price has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes.This would be an example of:

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

Financial payments that do not vary from month to month are referred to as variable expenses.

Insolvency is a result of having more liabilities than assets.

Which of the following would most likely be classified as a current liability?

Kathy Stumbaugh has determined that the value of her assets is $46,000 and the value of her debts is $32,000.The difference between these two is $14,000.The $14,000 could be referred to as her:

If a family planned to spend $370 for food during March but only spent $348,this difference would be referred to as a:

Which one of the following presents a summary of cash receipts and payments for a period of time?

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due in the near future?