Question 1

An individual's auto loan payments are listed as an expense on the income and expense statement.

Accepted Answer

A) True 
 B)False

Question 2

If Jenny obtains a loan to purchase a car in June, the loan amount will be included as income for the month of June.

Accepted Answer

A) True 
 B)False

Question 3

Jamil invested $9,500 in an account he expects will earn 5% annually. Approximately how many years will it take for the account to double in value? (Round answer to one decimal place.)

Accepted Answer

A) 8.8 
B) 9.7 
C) 10.8 
D) 11.4 
E) 14.2 
A) 8.8 
B) 9.7 
C) 10.8 
D) 11.4 
E) 14.2

Question 4

A balance sheet describes your:

Accepted Answer

A) financial position at a given point in time. 
B) financial performance over a period of time. 
C) financial performance at a given point in time. 
D) financial goals over a specific period of time. 
E) financial plans over a period of time. 
A) financial position at a given point in time. 
B) financial performance over a period of time. 
C) financial performance at a given point in time. 
D) financial goals over a specific period of time. 
E) financial plans over a period of time.

Question 5

Which of the following statements regarding budgets is true?

Accepted Answer

A) Budgets are detailed forward-looking financial reports based on expected income and expenses. 
B) Budgets describe a person's financial position at a given point in time. 
C) Budgets measure a person's financial performance at a given point in time. 
D) Budgets describe a person's financial goals over a specific period of time. 
E) Budgets are historical documents that tell an individual how he or she has performed in the past. 
A) Budgets are detailed forward-looking financial reports based on expected income and expenses. 
B) Budgets describe a person's financial position at a given point in time. 
C) Budgets measure a person's financial performance at a given point in time. 
D) Budgets describe a person's financial goals over a specific period of time. 
E) Budgets are historical documents that tell an individual how he or she has performed in the past.

Question 6

______  value is the value today of an amount to be received in the future.

Accepted Answer

A) Present 
B) Future 
C) Intrinsic 
D) Extrinsic 
E) Actual 
A) Present 
B) Future 
C) Intrinsic 
D) Extrinsic 
E) Actual

Question 7

The process of finding present value is called:

Accepted Answer

A) discounting. 
B) calculating. 
C) compounding. 
D) computing. 
E) balancing. 
A) discounting. 
B) calculating. 
C) compounding. 
D) computing. 
E) balancing.

Question 8

Inflation is expected to be 3% in the coming year. If Mr. Gonza earned $45,000 this year, how much must he earn in the following year to keep up with inflation and maintain a balance between his income and his increasing expenditures? (Show all work.)

Accepted Answer

To keep up with an inflation of 3% in th

Question 9

An income and expense statement provides a measure of financial performance over a period of time.

Accepted Answer

A) True 
 B)False

Question 10

______ are considered to be variable expenses.

Accepted Answer

A) Interest payments 
B) Medical expenses 
C) Rent payments 
D) Insurance expenses 
E) Cable TV fees 
A) Interest payments 
B) Medical expenses 
C) Rent payments 
D) Insurance expenses 
E) Cable TV fees

Question 11

An individual is said to have a balanced budget when his or her total income for the year equals or exceeds his or her total expenditures for the year.

Accepted Answer

A) True 
 B)False

Question 12

If your liquid assets equal $15,000 and your current debts equal $50,000, your liquidity ratio is:

Accepted Answer

A) 30%. 
B) 70%. 
C) 143%. 
D) 233%. 
E) 333%. 
A) 30%. 
B) 70%. 
C) 143%. 
D) 233%. 
E) 333%.

Question 13

If your annual budget shows a deficit, you can  ______  to balance your budget.

Accepted Answer

A) increase your savings 
B) increase your income 
C) increase your expenses 
D) increase your investments 
E) purchase real property 
A) increase your savings 
B) increase your income 
C) increase your expenses 
D) increase your investments 
E) purchase real property

Question 14

The best way to balance your annual budget is to increase borrowing to cover shortages.

Accepted Answer

A) True 
 B)False

Question 15

A ______  is an example of a tangible asset. ​

Accepted Answer

A) house 
B) patent 
C) copyright 
D) trademark 
E) mortgage 
A) house 
B) patent 
C) copyright 
D) trademark 
E) mortgage

Question 16

If your _____, your net worth on the balance sheet will increase from one period to the next.

Accepted Answer

A) liabilities increase and assets remain constant 
B) liabilities increase and assets decrease 
C) assets increase and liabilities remain constant 
D) income and liabilities decrease 
E) liabilities and expenses increase 
A) liabilities increase and assets remain constant 
B) liabilities increase and assets decrease 
C) assets increase and liabilities remain constant 
D) income and liabilities decrease 
E) liabilities and expenses increase

Question 17

Which of the following portions of a mortgage loan is recorded as a liability on the balance sheet?

Accepted Answer

A) Interest only 
B) Sum of the interest paid and the outstanding balance 
C) Sum of the interest due and the outstanding balance 
D) Outstanding principal portion only 
E) Principal portion and interest paid 
A) Interest only 
B) Sum of the interest paid and the outstanding balance 
C) Sum of the interest due and the outstanding balance 
D) Outstanding principal portion only 
E) Principal portion and interest paid

Question 18

Nominal interest rates are not adjusted for inflation.

Accepted Answer

A) True 
 B)False

Question 19

Once you define your ______   financial goals, you can prepare a cash budget for the upcoming year.

Accepted Answer

A) post-retirement 
B) short-term 
C) immediate 
D) long-term 
E) career-oriented 
A) post-retirement 
B) short-term 
C) immediate 
D) long-term 
E) career-oriented

Question 20

A budget is a financial report that forecasts an individual's current income as a percentage of his or her past earnings.

Accepted Answer

A) True 
 B)False

An individual's auto loan payments are listed as an expense on the income and expense statement.

If Jenny obtains a loan to purchase a car in June, the loan amount will be included as income for the month of June.

Jamil invested $9,500 in an account he expects will earn 5% annually. Approximately how many years will it take for the account to double in value? (Round answer to one decimal place.)

A balance sheet describes your:

Which of the following statements regarding budgets is true?

______ value is the value today of an amount to be received in the future.

The process of finding present value is called:

Inflation is expected to be 3% in the coming year. If Mr. Gonza earned $45,000 this year, how much must he earn in the following year to keep up with inflation and maintain a balance between his income and his increasing expenditures? (Show all work.)

An income and expense statement provides a measure of financial performance over a period of time.

______ are considered to be variable expenses.

An individual is said to have a balanced budget when his or her total income for the year equals or exceeds his or her total expenditures for the year.

If your liquid assets equal $15,000 and your current debts equal $50,000, your liquidity ratio is:

If your annual budget shows a deficit, you can ______ to balance your budget.

The best way to balance your annual budget is to increase borrowing to cover shortages.

A ______ is an example of a tangible asset.

If your _____, your net worth on the balance sheet will increase from one period to the next.

Which of the following portions of a mortgage loan is recorded as a liability on the balance sheet?

Nominal interest rates are not adjusted for inflation.

Once you define your ______ financial goals, you can prepare a cash budget for the upcoming year.

A budget is a financial report that forecasts an individual's current income as a percentage of his or her past earnings.

Understanding the Financial Process

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 2: Using Financial Statements and Budgets

An individual's auto loan payments are listed as an expense on the income and expense statement.

If Jenny obtains a loan to purchase a car in June, the loan amount will be included as income for the month of June.

Jamil invested $9,500 in an account he expects will earn 5% annually. Approximately how many years will it take for the account to double in value? (Round answer to one decimal place.)

A balance sheet describes your:

Which of the following statements regarding budgets is true?

______ value is the value today of an amount to be received in the future.

The process of finding present value is called:

Inflation is expected to be 3% in the coming year. If Mr. Gonza earned $45,000 this year, how much must he earn in the following year to keep up with inflation and maintain a balance between his income and his increasing expenditures? (Show all work.)

An income and expense statement provides a measure of financial performance over a period of time.

______ are considered to be variable expenses.

An individual is said to have a balanced budget when his or her total income for the year equals or exceeds his or her total expenditures for the year.

If your liquid assets equal $15,000 and your current debts equal $50,000, your liquidity ratio is:

If your annual budget shows a deficit, you can ______ to balance your budget.

The best way to balance your annual budget is to increase borrowing to cover shortages.

A ______ is an example of a tangible asset. ​

If your _____, your net worth on the balance sheet will increase from one period to the next.

Which of the following portions of a mortgage loan is recorded as a liability on the balance sheet?

Nominal interest rates are not adjusted for inflation.

Once you define your ______ financial goals, you can prepare a cash budget for the upcoming year.

A budget is a financial report that forecasts an individual's current income as a percentage of his or her past earnings.

Understanding the Financial Process

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

A ______ is an example of a tangible asset.