Question 1

To determine a person's solvency, which financial document should be consulted?

Accepted Answer

A)  Cash flow statement
B)  Budget
C)  Debt consolidation statement
D)  Personal balancesheet
E)  Credit reportF) A) and D)
G) A) and C)

Question 2

This year Taylor's gross income is $70,000.Her deductions for federal and provincial taxes, CPP contributions and employment insurance are $13,500.She also had after-tax investment earnings of $6,000.Taylor's take-home pay is:

Accepted Answer

A)  $70,000
B)  $76,000
C)  $77,500
D)  $56,500
E)  $62,000F) C) and D)
G) B) and E)

Question 3

A family with $90,000in assets and $52,000 of liabilities would have a net worth of:

Accepted Answer

A)  $70,000.
B)  $22,000.
C)  $38,000
D)  $92,000.
E)  $41,000.F) A) and D)
G) A) and B)

Question 4

A family with $70,000in assets and $22,000 of liabilities would have a net worth of:

Accepted Answer

A)  $70,000.
B)  $22,000.
C)  $48,000
D)  $92,000.
E)  $41,000.F) All of the above
G) A) and B)

Question 5

Janice spends a total of $2,500 a month to cover all living expenses.Which of the following would represent the maximum suggested acceptable emergency fund?

Accepted Answer

A)  Zero
B)  $1,500
C)  $7,500
D)  $15,000
E)  $5,000F) B) and C)
G) C) and D)

Question 6

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

Accepted Answer

A)  $11,810
B)  $11,410
C)  $10,910
D)  $6,810
E)  $6,500F) B) and D)
G) A) and B)

Question 7

A home file should be used for:

Accepted Answer

A)  storing all financial documents and records.
B)  obsolete financial documents.
C)  documents that requiremaximum security.
D)  financial recordsfor current needs.
E)  records that are difficult to replace.F) All of the above
G) C) and E)

Question 8

Which of the following payments would be considered a variable expense?

Accepted Answer

A)  Rent
B)  An installment loan payment
C)  A mortgage payment
D)  A monthlyparking fee
E)  A telephone billF) D) and E)
G) A) and E)

Question 9

The main purposes of personal financial statements are to:

Accepted Answer

A)  summarize the value of the items that you own and the amountsthat you owe
B)  track your cash inflowsby source and your outflows by type
C)  identify strengths and weaknesses in your current financial situation and provide data for use in filing your income tax return or applying for credit
D)  measure progress toward your financial goals
E)  all of the aboveF) C) and E)
G) B) and D)

Question 10

Saving and investing for the future reduces the amount you can spend now is an example of a(n) :

Accepted Answer

A)  Opportunity cost
B)  Cash flow management
C)  Spending habits
D)  Savings planE) A) and C)
F) None of the above

Question 11

A family with $80,000in assets and $22,000 of liabilities would have a net worth of:

Accepted Answer

A)  $80,000.
B)  $22,000.
C)  $58,000
D)  $102,000.
E)  $36,000.F) None of the above
G) B) and E)

Question 12

Liabilities are amountsrepresenting

Accepted Answer

A)  taxable income
B)  items of value.
C)  living expenses.
D)  debts
E)  current assets.F) A) and E)
G) A) and D)

Question 13

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

Accepted Answer

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

Question 14

Low national savings rates have what effect on the economy?

Accepted Answer

A)  No effect
B)  Stimulate growth
C)  Slow growth
D)  Cause a balanceof trade deficit
E)  Cause government deficitF) B) and C)
G) B) and E)

Question 15

When one money management decision is selected, something else must be given up.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  FT-4 slips
B)  Personal financial statements
C)  Warranties
D)  Stock certificates
E)  Checking accountstatementsF) A) and D)
G) A) and C)

Question 17

During the last month, Astrid had expenses of $6,000 and an increase in net worth of $100.This means Astrid's income for the month was:

Accepted Answer

A)  $6,000
B)  $5,900
C)  $6,100
D)  $5,700
E)  $5,200F) A) and D)
G) A) and C)

Question 18

Financial recordsthat may need to be referred to on a regular basis should not be kept in a safety deposit box.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following presents a summary of income and outflows for a period of time?

Accepted Answer

A)  A cash flow statement
B)  A bank statement
C)  An investment summary
D)  balance sheet
E)  An asset reportF) C) and D)
G) B) and C)

Question 20

Evidence exists that a person's choice of employment influences his or her lifestyle.

Accepted Answer

A) True 
 B)False

Exam 2: Money Management Strategy: Financial Statements and Budgeting

Low national savings rates have what effect on the economy?

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A family with $90,000in assets and $52,000 of liabilities would have a net worth of:

Correct AnswerverifiedShow Answer

A family with $80,000in assets and $22,000 of liabilities would have a net worth of:

Correct AnswerverifiedShow Answer

A home file should be used for:

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Which of the following payments would be considered a variable expense?

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The main purposes of personal financial statements are to:

Correct AnswerverifiedShow Answer

Which of the following presents a summary of income and outflows for a period of time?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Evidence exists that a person's choice of employment influences his or her lifestyle.

Correct AnswerverifiedShow Answer

Saving and investing for the future reduces the amount you can spend now is an example of a(n) :

Correct AnswerverifiedShow Answer

When one money management decision is selected, something else must be given up.

Correct AnswerverifiedShow Answer

To determine a person's solvency, which financial document should be consulted?

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Financial recordsthat may need to be referred to on a regular basis should not be kept in a safety deposit box.

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Janice spends a total of $2,500 a month to cover all living expenses.Which of the following would represent the maximum suggested acceptable emergency fund?

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Liabilities are amountsrepresenting

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This year Taylor's gross income is $70,000.Her deductions for federal and provincial taxes, CPP contributions and employment insurance are $13,500.She also had after-tax investment earnings of $6,000.Taylor's take-home pay is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A family with $70,000in assets and $22,000 of liabilities would have a net worth of:

Correct AnswerverifiedShow Answer

During the last month, Astrid had expenses of $6,000 and an increase in net worth of $100.This means Astrid's income for the month was:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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