Question 1

Insolvency is the inability to pay debts by the due date,because liabilities exceed the value of assets.

Accepted Answer

A) True 
 B)False

Question 2

A personal balance sheet presents

Accepted Answer

A)   items owned and amounts owed.
B)   income and expenses for a period of time.
C)   earnings on savings and investments.
D)   amounts budgeted for spending
E)   family financial goals.F) All of the above
G) B) and C)

Question 3

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) A) and C)
G) A) and B)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Definite financial obligations are referred to as variable expenses.

Accepted Answer

A) True 
 B)False

Question 6

The current financial 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 C)
G) A) and E)

Question 7

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) None of the above
G) C) and E)

Question 8

Total earnings of a person less 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) A) and B)
G) B) and D)

Question 9

A common deduction from a person's paycheck is for

Accepted Answer

A)   interest.
B)   unemployment
C)   rent.
D)   taxes.
E)   current liabilities.F) A) and E)
G) None of the above

Question 10

Most Canadians have an adequate savings for emergencies.

Accepted Answer

A) True 
 B)False

Question 11

Opportunity cost refers to:

Accepted Answer

A)   current spending habits.
B)   changing economic conditions that affect a person's cost of living.
C)   storage facilities to make financial documents easily available.
D)   trade-offs associated with financial decisions.
E)   avoiding the use of consumer credit.F) A) and E)
G) A) and D)

Question 12

Take-home pay is a person's earnings after deductions for taxes and other items.

Accepted Answer

A) True 
 B)False

Question 13

Janice spends a total of $1,500 a month to cover all living expenses.Which of the following would represent the appropriate emergency fund?

Accepted Answer

A)   $1,500 to $4,500
B)   $3,000 to $7,500
C)   $4,500 to $9,000
D)   $5,000 to $10,000
E)   $6,000 to $12,000F) A) and D)
G) B) and C)

Question 14

A family with $70,000 in 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) B) and C)
G) A) and E)

Question 15

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) D) and E)
G) C) and D)

Question 16

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

Accepted Answer

A)   A charge account payment
B)   A mortgage
C)   An installment loan
D)   An amount due for taxes
E)   The amount due on a credit cardF) A) and B)
G) B) and E)

Question 17

During the past month,Jennifer Sinnet had income of $3,500 and a decrease in net worth of $200.This means Jennifer's payments for the month were:

Accepted Answer

A)   $3,700.
B)   $3,300.
C)   $2,800.
D)   $1,000.
E)   $200.F) A) and B)
G) B) and D)

Question 18

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) A) and B)
G) A) and C)

Question 19

The Crown family has a difficult time staying on a budget.In an effort to actually see what funds are available for various expenses,a ____________ budget would be most appropriate.

Accepted Answer

A)   written
B)   computerized
C)   physical
D)   deficit
E)   mentalF) None of the above
G) A) and D)

Question 20

Most income tax documents and records should be kept in a safety deposit box.

Accepted Answer

A) True 
 B)False

Exam 2: Money Management Skills

The Crown family has a difficult time staying on a budget.In an effort to actually see what funds are available for various expenses,a ____________ budget would be most appropriate.

Correct AnswerverifiedShow Answer

Most Canadians have an adequate savings for emergencies.

Correct AnswerverifiedShow Answer

A common deduction from a person's paycheck is for

Correct AnswerverifiedShow Answer

Janice spends a total of $1,500 a month to cover all living expenses.Which of the following would represent the appropriate emergency fund?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Insolvency is the inability to pay debts by the due date,because liabilities exceed the value of assets.

Correct AnswerverifiedShow Answer

Current liabilities differ from long-term liabilities based on

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

During the past month,Jennifer Sinnet had income of $3,500 and a decrease in net worth of $200.This means Jennifer's payments for the month were:

Correct AnswerverifiedShow Answer

Total earnings of a person less deductions for taxes and other items is called

Correct AnswerverifiedShow Answer

Take-home pay is a person's earnings after deductions for taxes and other items.

Correct AnswerverifiedShow Answer

Definite financial obligations are referred to as variable expenses.

Correct AnswerverifiedShow Answer

Opportunity cost refers to:

Correct AnswerverifiedShow Answer

Most income tax documents and records should be kept in a safety deposit box.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A personal balance sheet presents

Correct AnswerverifiedShow Answer

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