Question 1

Which of the following situations is a person who could be insolvent?

Accepted Answer

A)  Assets $56,000; annual expenses $60,000
B)  Assets $68,000; net worth $22,000
C)  Liabilities $45,000; net worth $6,000
D)  Assets $60,000; liabilities $61,000
E)  Annual cash inflows$48,000; liabilities $50,000F) B) and C)
G) C) and D)

Question 2

A person's net worth is the difference between the value of the items owned and the amounts owed to others.

Accepted Answer

A) True 
 B)False  True

Question 3

A family with $110,000 in assets and $49,000 of liabilities would have a net worth of:

Accepted Answer

A)  $70,000.
B)  $22,000.
C)  $61,000
D)  $92,000.
E)  $41,000.F) C) and E)
G) C) and D)

Question 4

Which of the following financial documents would most likely be stored in a safety deposit box?

Accepted Answer

A)  Tax records
B)  Personal financial statements
C)  Warranties
D)  Mortgage papers
E)  Checking accountstatementsF) A) and D)
G) A) and B)

Question 5

The currentfinancial position of an individual or family is best presented with the use of a(n)

Accepted Answer

A)  budget.
B)  cash flow statement.
C)  balance sheet.
D)  bank statement.
E)  time value of money report.F) A) and E)
G) A) and D)

Question 6

Liquid assets refer to

Accepted Answer

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

Question 7

A person's lifestyle is a reflection of his or her values, goals, career, and family situation.

Accepted Answer

A) True 
 B)False

Question 8

A five-year non-redeemable GIC is classified as a(n)  _______________ asset on the personal balance sheet.

Accepted Answer

A)  liquid
B)  investment
C)  personal
D)  business
E)  marketableF) None of the above
G) A) and D) B

Question 9

____________ is the recommended budgeting strategy for dual income households where the two partners have trust and shared values and goals?

Accepted Answer

A)  Pooled income
B)  50/50
C)  Proportionate contributions
D)  Sharing the bills
E)  Sharing goalsF) A) and B)
G) D) and E)

Question 10

An organized system of financial records provides a basis for:

Accepted Answer

A)  Handling daily business affairs, including paying bills on time
B)  Handling long term business affairs
C)  Handling moderate term business affairs
D)  Investment opportunitiesE) B) and D)
F) A) and D)

Question 11

Buying on credit results in payments later and a reduction in the amount of future income available for spending is an example of a(n) :

Accepted Answer

A)  Opportunity cost
B)  Cash flow management
C)  Spending habits
D)  Savings planE) A) and D)
F) B) and C) A

Question 12

If budgeted spending is less than actual spending, this is referred to as a deficit.

Accepted Answer

A) True 
 B)False

Question 13

A person's net worth would decrease as a result of

Accepted Answer

A)  decreased value on investments
B)  increased earnings.
C)  decreased spending for current living expenses.
D)  decreased value of personal possessions.
E)  decreased amount owed to others.F) All of the above
G) A) and C)

Question 14

Jennifer, a recent Concordia graduate, is struggling to pay off her $15,000 student loan.She has found employment with an international firm.Jennifer manages to balance her cash flows, but has only $500 in a chequing account to pay incoming bills.Her monthly after-tax cash inflows and expenses equal $2,000.What should be Jennifer's number one financial goal?

Accepted Answer

A)  Pay off her studentloan immediately.
B)  Start an emergency fund.
C)  Contribute to an RRSP.
D)  Purchase life insurance coverage.
E)  Accumulate funds for a down paymenton a homeF) B) and D)
G) B) and C)

Question 15

An organized system of financial records provides a basis for:

Accepted Answer

A)  Planning and measuring financial progress.
B)  Handling long term business affairs
C)  Handling moderate term business affairs
D)  Analyzing opportunity costsE) B) and C)
F) A) and D)

Question 16

Given the following, what is the individual's net worth?

Accepted Answer

A)  $16,810
B)  $10,410
C)  $10,910
D)  $6,810
E)  $6,500F) A) and E)
G) A) and C)

Question 17

To calculate your net worth, you need to know your:

Accepted Answer

A)  annual income
B)  assets and liabilities
C)  monthly car loan cost
D)  income after tax
E)  pension contributionsF) All of the above
G) A) and B)

Question 18

If expenses for a month are greater than income, an increase in net worth will result.

Accepted Answer

A) True 
 B)False

Question 19

A person with $80,000in assets and $122,000 of liabilities would have a net worth of:

Accepted Answer

A)  $80,000.
B)  $122,000.
C)  $202,000
D)  $42,000.
E)  - $42,000.F) A) and B)
G) B) and E)

Question 20

Which of the following are considered to be personal financial statements?

Accepted Answer

A)  Budget and credit card statements
B)  Balance sheet and cash flow statement
C)  Checkbook and budget
D)  Tax returns
E)  Bank statement and savings passbookF) C) and E)
G) A) and D)

Exam 2: Money Management Strategy: Financial Statements and Budgeting

Which of the following situations is a person who could be insolvent?

Correct Answer
verified

A person's net worth is the difference between the value of the items owned and the amounts owed to others.

Correct Answer
verified
True

A family with $110,000 in assets and $49,000 of liabilities would have a net worth of:

Correct Answer
verified

Which of the following financial documents would most likely be stored in a safety deposit box?

Correct Answer
verified

The currentfinancial position of an individual or family is best presented with the use of a(n)

Correct Answer
verified

Liquid assets refer to

Correct Answer
verified

A person's lifestyle is a reflection of his or her values, goals, career, and family situation.

Correct Answer
verified

A five-year non-redeemable GIC is classified as a(n) _______________ asset on the personal balance sheet.

Correct Answer
verified
B

____________ is the recommended budgeting strategy for dual income households where the two partners have trust and shared values and goals?

Correct Answer
verified

An organized system of financial records provides a basis for:

Correct Answer
verified

Buying on credit results in payments later and a reduction in the amount of future income available for spending is an example of a(n) :

Correct Answer
verified
A

If budgeted spending is less than actual spending, this is referred to as a deficit.

Correct Answer
verified

A person's net worth would decrease as a result of

Correct Answer
verified

Correct Answer
verified

An organized system of financial records provides a basis for:

Correct Answer
verified

Given the following, what is the individual's net worth?

Correct Answer
verified

To calculate your net worth, you need to know your:

Correct Answer
verified

If expenses for a month are greater than income, an increase in net worth will result.

Correct Answer
verified

A person with $80,000in assets and $122,000 of liabilities would have a net worth of:

Correct Answer
verified

Which of the following are considered to be personal financial statements?

Correct Answer
verified

Exam 2: Money Management Strategy: Financial Statements and Budgeting

Which of the following situations is a person who could be insolvent?

Correct AnswerverifiedShow Answer

A person's net worth is the difference between the value of the items owned and the amounts owed to others.

Correct AnswerverifiedTrue

A family with $110,000 in assets and $49,000 of liabilities would have a net worth of:

Correct AnswerverifiedShow Answer

Which of the following financial documents would most likely be stored in a safety deposit box?

Correct AnswerverifiedShow Answer

The currentfinancial position of an individual or family is best presented with the use of a(n)

Correct AnswerverifiedShow Answer

Liquid assets refer to

Correct AnswerverifiedShow Answer

A person's lifestyle is a reflection of his or her values, goals, career, and family situation.

Correct AnswerverifiedShow Answer

A five-year non-redeemable GIC is classified as a(n) _______________ asset on the personal balance sheet.

Correct AnswerverifiedB

____________ is the recommended budgeting strategy for dual income households where the two partners have trust and shared values and goals?

Correct AnswerverifiedShow Answer

An organized system of financial records provides a basis for:

Correct AnswerverifiedShow Answer

Buying on credit results in payments later and a reduction in the amount of future income available for spending is an example of a(n) :

Correct AnswerverifiedA

If budgeted spending is less than actual spending, this is referred to as a deficit.

Correct AnswerverifiedShow Answer

A person's net worth would decrease as a result of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An organized system of financial records provides a basis for:

Correct AnswerverifiedShow Answer

Given the following, what is the individual's net worth?

Correct AnswerverifiedShow Answer

To calculate your net worth, you need to know your:

Correct AnswerverifiedShow Answer

If expenses for a month are greater than income, an increase in net worth will result.

Correct AnswerverifiedShow Answer

A person with $80,000in assets and $122,000 of liabilities would have a net worth of:

Correct AnswerverifiedShow Answer

Which of the following are considered to be personal financial statements?

Correct AnswerverifiedShow Answer

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True

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B

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A

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