Question 1

Karen Phillips 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 personal balance sheet.
D)  a liquidation exercise.
E)  a budget variance.F) All of the above
G) D) and E)

Question 2

In order to calculate a person's savings ratio,the amount saved each month is divided by net income.

Accepted Answer

A) True 
 B)False

Question 3

The value of the home you own would be included in which section of your balance sheet?

Accepted Answer

A)  Liquid assets
B)  Investment assets
C)  Real estate assets
D)  Personal possessions
E)  Current liabilitiesF) B) and C)
G) C) and D) C

Question 4

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 theseF) C) and D)
G) A) and D)

Question 5

One of the main purposes of a budget is to help you:

Accepted Answer

A)  Live within your income.
B)  Spend your money quickly.
C)  Reach your career goals.
D)  Prepare for financial non-emergencies.
E)  Develop spontaneous financial management habits.F) A) and E)
G) B) and D)

Question 6

Liquid assets refer to:

Accepted Answer

A)  amounts that must be paid soon.
B)  cash and items of value that can be 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) A) and C)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 expensesF) None of the above
G) D) and E)

Question 9

Which one of the following is the best example of a long-term goal for a married couple with no children?

Accepted Answer

A)  Buy a new car
B)  Increase life insurance
C)  Increase savings
D)  Provide for retirement income
E)  Complete collegeF) A) and D)
G) A) and B)

Question 10

Patricia McDonald has determined that the value of her liquid assets is $4,500,the value of her real estate is $135,000,the value of her personal possessions is $58,000,and the value of her investment assets is $72,000.She has also determined the value of her current liabilities is $7,500 and the value of her long term liabilities is $98,000.What is Patricia's net worth?

Accepted Answer

A)  $269,500
B)  $105,500
C)  $164,000
D)  $205,500
E)  $132,000F) B) and E)
G) A) and D)

Question 11

Catherine Jones 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 $119,000.She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300.She has a car worth $12,500.She has recently purchased a mutual fund worth $5,500 and she has a retirement account worth $38,550.What is the value of her real estate assets?

Accepted Answer

A)  $2,050
B)  $119,000
C)  $27,800
D)  $44,050
E)  $171,900F) A) and B)
G) B) and D)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A personal balance sheet:

Accepted Answer

A)  predicts income and expenses.
B)  reports what an individual or a family owns and owes.
C)  reports income and expenses for an individual or a family.
D)  predicts investment success.
E)  analyzes debt payment activities.F) C) and E)
G) A) and B)

Question 14

Which of the following would be considered a long-term liability?

Accepted Answer

A)  Charge account
B)  Mortgage
C)  Six month cash loan
D)  Tax payment
E)  Insurance premiumF) All of the above
G) A) and E) B

Question 15

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

Accepted Answer

A)  reducing the amounts you owe to others.
B)  decreasing savings.
C)  increasing spending for current living expenses.
D)  decreasing the value of personal possessions.
E)  decreasing the value of investments.F) A) and E)
G) A) and D)

Question 16

Current liabilities differ from long-term liabilities based on:

Accepted Answer

A)  the amount owed.
B)  the financial situation of the creditor.
C)  the interest rate charged.
D)  when the debt is due.
E)  current economic conditions.F) B) and D)
G) All of the above

Question 17

Chris Carter needs to store monthly statements from his bank,his credit card company and his savings accounts.Where is the most appropriate place for Chris to store this information?

Accepted Answer

A)  Home file
B)  Safe deposit box
C)  File at work
D)  Best friend's house
E)  No storage neededF) All of the above
G) A) and E)

Question 18

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 within one year?

Accepted Answer

A)  Budget variance
B)  Investment assets
C)  Long-term liabilities
D)  Current assets
E)  Current liabilitiesF) All of the above
G) A) and D) E

Question 19

Insolvency occurs when liabilities far exceed available assets.

Accepted Answer

A) True 
 B)False

Question 20

A personal balance sheet presents:

Accepted Answer

A)  amounts budgeted for spending.
B)  income and expenses for a period of time.
C)  earnings on savings and investments.
D)  items you own and amounts you owe.
E)  family financial goals.F) A) and E)
G) C) and D)

Exam 3: Money Management Strategy: Financial Statements and Budgeting

Karen Phillips 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:

Correct Answer
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In order to calculate a person's savings ratio,the amount saved each month is divided by net income.

Correct Answer
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The value of the home you own would be included in which section of your balance sheet?

Correct Answer
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C

Correct Answer
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One of the main purposes of a budget is to help you:

Correct Answer
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Liquid assets refer to:

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

Correct Answer
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Which of the following would be considered a fixed expense?

Correct Answer
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Which one of the following is the best example of a long-term goal for a married couple with no children?

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

Correct Answer
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A personal balance sheet:

Correct Answer
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Which of the following would be considered a long-term liability?

Correct Answer
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B

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

Correct Answer
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Current liabilities differ from long-term liabilities based on:

Correct Answer
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Chris Carter needs to store monthly statements from his bank,his credit card company and his savings accounts.Where is the most appropriate place for Chris to store this information?

Correct Answer
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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 within one year?

Correct Answer
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E

Insolvency occurs when liabilities far exceed available assets.

Correct Answer
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A personal balance sheet presents:

Correct Answer
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Exam 3: Money Management Strategy: Financial Statements and Budgeting

Karen Phillips 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:

Correct AnswerverifiedShow Answer

In order to calculate a person's savings ratio,the amount saved each month is divided by net income.

Correct AnswerverifiedShow Answer

The value of the home you own would be included in which section of your balance sheet?

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

One of the main purposes of a budget is to help you:

Correct AnswerverifiedShow Answer

Liquid assets refer to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following would be considered a fixed expense?

Correct AnswerverifiedShow Answer

Which one of the following is the best example of a long-term goal for a married couple with no children?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A personal balance sheet:

Correct AnswerverifiedShow Answer

Which of the following would be considered a long-term liability?

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

Current liabilities differ from long-term liabilities based on:

Correct AnswerverifiedShow Answer

Chris Carter needs to store monthly statements from his bank,his credit card company and his savings accounts.Where is the most appropriate place for Chris to store this information?

Correct AnswerverifiedShow Answer

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 within one year?

Correct AnswerverifiedE

Insolvency occurs when liabilities far exceed available assets.

Correct AnswerverifiedShow Answer

A personal balance sheet presents:

Correct AnswerverifiedShow Answer

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C

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B

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E

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