Question 1

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 liabilitiesF) A) and B)
G) C) and D) E

Question 2

A home file should be used for:

Accepted Answer

A)   storing all financial documents and records.
B)   financial records for current needs.
C)   documents that require maximum security.
D)   obsolete financial documents.
E)   records that are difficult to replace.F) C) and E)
G) A) and E)

Question 3

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 D)
G) B) and D)

Question 4

Nick Boss has a savings account with $550 in it. He knows that he can withdraw this money whenever he wishes. This would be an example of:

Accepted Answer

A)   money management.
B)   an opportunity cost.
C)   a limited asset.
D)   a liquid asset.
E)   net worth analysis.F) B) and E)
G) A) and C)

Question 5

Definite financial obligations are referred to as variable expenses.

Accepted Answer

A) True 
 B)False

Question 6

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.F) All of the above
G) A) and D)

Question 7

Insolvency is a result of having more liabilities than assets.

Accepted Answer

A) True 
 B)False

Question 8

Improvements in a person's financial position are the result of:

Accepted Answer

A)   increased liabilities.
B)   reductions in earnings.
C)   increased savings and investments.
D)   increased purchases on credit.
E)   lower amounts deposited in savings.F) A) and B)
G) B) and D)

Question 9

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

Question 10

Which one of the following illustrates an insolvent situation?

Accepted Answer

A)   Assets $56,000; annual expenses $60,000
B)   Assets $78,000; net worth $22,000
C)   Liabilities $45,000; net worth $6,000
D)   Assets $40,000; liabilities $45,000
E)   Annual cash inflows $45,000; liabilities $50,000F) C) and D)
G) B) and E)

Question 11

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.F) A) and B)
G) All of the above

Question 12

When preparing her monthly budget, Marge Kent has a total spending allowance of $4,600. Each month she pays $1,200 in rent, $60 for cable television and Internet service, and $240 for her auto loan. What percentage of her budget goes for these fixed expenses?

Accepted Answer

A)   6 percent
B)   12 percent
C)   27 percent
D)   33 percent
E)   40 percentF) C) and E)
G) A) and C)

Question 13

Allen Arnold has determined that the amount of money he spends on his mortgage payment, car insurance payment, and cable bill totals $1,200 each month. What type of expenses has Allen determined with this calculation?

Accepted Answer

A)   Current liabilities
B)   Long term liabilities
C)   Net worth
D)   Variable expenses
E)   Fixed expensesF) B) and D)
G) B) and C)

Question 14

A person has $1,250 in liabilities, monthly savings of $200, and monthly gross income of $2,500. What is the person's savings ratio?

Accepted Answer

A)   0.52
B)   0.08
C)   2.35
D)   0.16
E)   12.58F) C) and D)
G) A) and B) B

Question 15

Which one of the following is the best example of a long-term goal for a young couple?

Accepted Answer

A)   A new car
B)   Reduction of amounts owed on credit cards
C)   Increased savings
D)   Income for retirement
E)   Funds for a vacationF) A) and D)
G) B) and C)

Question 16

Patricia McDonald has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1,200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300. She has a car worth $12,500 and owes $7,800 on her auto loan. She has also purchased some stock worth $5,500 and she has a retirement account worth $38,550. What is the total value of her assets?

Accepted Answer

A)   $2,050
B)   $98,000
C)   $27,800
D)   $44,050
E)   $171,900F) A) and C)
G) A) and B)

Question 17

The current financial position (including net worth)  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 B)
G) None of the above

Question 18

What types of financial records and documents should be kept in a safe deposit box?

Accepted Answer

The answer of What types of financial records and documents...

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Definite financial obligations are referred to as:

Accepted Answer

A)   fixed expenses.
B)   variable expenses.
C)   cash flow.
D)   insolvency.
E)   budget variance.F) C) and D)
G) B) and C) A

Exam 3: Money Management Strategy: Financial Statements and Budgeting

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?

Correct Answer
verified
E

A home file should be used for:

Correct Answer
verified

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

Correct Answer
verified

Nick Boss has a savings account with $550 in it. He knows that he can withdraw this money whenever he wishes. This would be an example of:

Correct Answer
verified

Definite financial obligations are referred to as variable expenses.

Correct Answer
verified

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

Correct Answer
verified

Insolvency is a result of having more liabilities than assets.

Correct Answer
verified

Improvements in a person's financial position are the result of:

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

Which one of the following illustrates an insolvent situation?

Correct Answer
verified

Liquid assets refer to:

Correct Answer
verified

When preparing her monthly budget, Marge Kent has a total spending allowance of $4,600. Each month she pays $1,200 in rent, $60 for cable television and Internet service, and $240 for her auto loan. What percentage of her budget goes for these fixed expenses?

Correct Answer
verified

Allen Arnold has determined that the amount of money he spends on his mortgage payment, car insurance payment, and cable bill totals $1,200 each month. What type of expenses has Allen determined with this calculation?

Correct Answer
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A person has $1,250 in liabilities, monthly savings of $200, and monthly gross income of $2,500. What is the person's savings ratio?

Correct Answer
verified
B

Which one of the following is the best example of a long-term goal for a young couple?

Correct Answer
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Correct Answer
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The current financial position (including net worth) of an individual or family is best presented with the use of a(n) :

Correct Answer
verified

What types of financial records and documents should be kept in a safe deposit box?

Correct Answer
verified

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

Correct Answer
verified

Definite financial obligations are referred to as:

Correct Answer
verified
A

Exam 3: Money Management Strategy: Financial Statements and Budgeting

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?

Correct AnswerverifiedE

A home file should be used for:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Nick Boss has a savings account with $550 in it. He knows that he can withdraw this money whenever he wishes. This would be an example of:

Correct AnswerverifiedShow Answer

Definite financial obligations are referred to as variable expenses.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Insolvency is a result of having more liabilities than assets.

Correct AnswerverifiedShow Answer

Improvements in a person's financial position are the result of:

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 AnswerverifiedShow Answer

Which one of the following illustrates an insolvent situation?

Correct AnswerverifiedShow Answer

Liquid assets refer to:

Correct AnswerverifiedShow Answer

When preparing her monthly budget, Marge Kent has a total spending allowance of $4,600. Each month she pays $1,200 in rent, $60 for cable television and Internet service, and $240 for her auto loan. What percentage of her budget goes for these fixed expenses?

Correct AnswerverifiedShow Answer

Allen Arnold has determined that the amount of money he spends on his mortgage payment, car insurance payment, and cable bill totals $1,200 each month. What type of expenses has Allen determined with this calculation?

Correct AnswerverifiedShow Answer

A person has $1,250 in liabilities, monthly savings of $200, and monthly gross income of $2,500. What is the person's savings ratio?

Correct AnswerverifiedB

Which one of the following is the best example of a long-term goal for a young couple?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The current financial position (including net worth) of an individual or family is best presented with the use of a(n) :

Correct AnswerverifiedShow Answer

What types of financial records and documents should be kept in a safe deposit box?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Definite financial obligations are referred to as:

Correct AnswerverifiedA

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E

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B

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A