Question 1

The first step in financial planning is to:

Accepted Answer

A) define one's financial goals. 
B) set up a budget. 
C) calculate one's liquidity ratio. 
D) prepare a trend analysis. 
E) list expenses. 
A) define one's financial goals. 
B) set up a budget. 
C) calculate one's liquidity ratio. 
D) prepare a trend analysis. 
E) list expenses.

Question 2

You are solvent if your:

Accepted Answer

A) total liabilities exceed your total assets. 
B) total assets exceed your total liabilities. 
C) total assets exceed your equity. 
D) total liabilities exceed your equity. 
E) current liabilities exceed your current assets. 
A) total liabilities exceed your total assets. 
B) total assets exceed your total liabilities. 
C) total assets exceed your equity. 
D) total liabilities exceed your equity. 
E) current liabilities exceed your current assets.

Question 3

A cash budget will have value only if it is actually used and:

Accepted Answer

A) records of actual income and expenses are kept. 
B) spending never deviates from the budgeted amount. 
C) it reflects actual financial position. 
D) it takes into account only credit transactions. 
E) all liabilities are paid. 
A) records of actual income and expenses are kept. 
B) spending never deviates from the budgeted amount. 
C) it reflects actual financial position. 
D) it takes into account only credit transactions. 
E) all liabilities are paid.

Question 4

Construct a balance sheet using the following information. Be sure the format is correct. (Show all work.)

Accepted Answer

The answer of Construct a balance sheet using the following...

Question 5

_____ is an example of personal property.

Accepted Answer

A) Jewelry 
B) A mutual fund 
C) A corporate bond 
D) A charge account 
E) A certificate of deposit 
A) Jewelry 
B) A mutual fund 
C) A corporate bond 
D) A charge account 
E) A certificate of deposit

Question 6

Total assets on your balance sheet are $6,000 and liabilities are $2,000. Your solvency ratio will be:

Accepted Answer

A) 30%. 
B) 33%. 
C) 67%. 
D) 85%. 
E) 75%. 
A) 30%. 
B) 33%. 
C) 67%. 
D) 85%. 
E) 75%.

Question 7

Amit lists his gross salary in the income portion of his income and expense statement, and he includes his income taxes and Social Security taxes in the expenses portion.

Accepted Answer

A) True 
 B)False

Question 8

Your car has a market value of $4,000, while the balance of the loan against it is now $2,500. Your ownership interest in the car is:

Accepted Answer

A) $2,500. 
B) $4,000. 
C) $6,500. 
D) $1,500. 
E) $5,500. 
A) $2,500. 
B) $4,000. 
C) $6,500. 
D) $1,500. 
E) $5,500.

Question 9

The Flemings will need $80,000 annually for 20 years during their retirement. How much will they have at retirement if they can earn a 4% rate of interest on their investment?

Accepted Answer

In the financial calculator, i

Question 10

The income and expense statement measures your financial:

Accepted Answer

A) obligations that have been paid. 
B) performance over time. 
C) current position. 
D) liquid assets. 
E) long-term objectives. 
A) obligations that have been paid. 
B) performance over time. 
C) current position. 
D) liquid assets. 
E) long-term objectives.

Question 11

A cash budget has value only if you use it, and you keep careful records of actual income and expenses.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is one of the three stages in preparing a cash budget?

Accepted Answer

A) Calculating financial ratios 
B) Estimating expenses 
C) Calculating depreciation expenses 
D) Finalizing the balance sheet 
E) Preparing the bank reconciliation report 
A) Calculating financial ratios 
B) Estimating expenses 
C) Calculating depreciation expenses 
D) Finalizing the balance sheet 
E) Preparing the bank reconciliation report

Question 13

Michael and Sandy purchased a home for $100,000 5 years ago. If its value appreciated at 6% annually, what is it worth today? (Round the answer to the nearest dollar.)

Accepted Answer

A) $100,000 
B) $106,000 
C) $130,000 
D) $133,823 
E) $135,603 
A) $100,000 
B) $106,000 
C) $130,000 
D) $133,823 
E) $135,603

Question 14

An income statement includes:

Accepted Answer

A) income, liabilities, and net worth. 
B) income, expenses, and cash surplus or deficit. 
C) expenses, net worth, and cash surplus or deficit. 
D) net worth, surplus, and profit or loss. 
E) savings, surplus, and profit or loss. 
A) income, liabilities, and net worth. 
B) income, expenses, and cash surplus or deficit. 
C) expenses, net worth, and cash surplus or deficit. 
D) net worth, surplus, and profit or loss. 
E) savings, surplus, and profit or loss.

Question 15

A balance sheet provides a statement of one's financial:

Accepted Answer

A) position. 
B) performance. 
C) goals. 
D) ratios. 
E) history. 
A) position. 
B) performance. 
C) goals. 
D) ratios. 
E) history.

Question 16

There is a need for budget adjustments when:

Accepted Answer

A) income is stable. 
B) account deficits and surpluses balance out. 
C) account deficits are more than surpluses. 
D) a new calendar year begins. 
E) short-term financial goals are achieved. 
A) income is stable. 
B) account deficits and surpluses balance out. 
C) account deficits are more than surpluses. 
D) a new calendar year begins. 
E) short-term financial goals are achieved.

Question 17

Net income should be used when preparing an income and expense statement.

Accepted Answer

A) True 
 B)False

Question 18

______  is the most preferred way for one to deal with budget deficits.

Accepted Answer

A) Liquidating savings and investments 
B) Borrowing money from relatives 
C) Cutting low-priority expenses 
D) Increasing income 
E) Paying all short-term liabilities 
A) Liquidating savings and investments 
B) Borrowing money from relatives 
C) Cutting low-priority expenses 
D) Increasing income 
E) Paying all short-term liabilities

Question 19

Investment assets are required to :

Accepted Answer

A) be used in our everyday lives. 
B) increase productivity. 
C) provide a service. 
D) earn a return. 
E) be easily converted to cash. 
A) be used in our everyday lives. 
B) increase productivity. 
C) provide a service. 
D) earn a return. 
E) be easily converted to cash.

Question 20

Which of the following statements regarding a budget is true?

Accepted Answer

A) It shows the computation of the interest on a loan. 
B) It is a schedule of personal investments. 
C) It is a list of prepaid expenses. 
D) It is a detailed financial report that looks forward. 
E) It identifies your assets and liabilities. 
A) It shows the computation of the interest on a loan. 
B) It is a schedule of personal investments. 
C) It is a list of prepaid expenses. 
D) It is a detailed financial report that looks forward. 
E) It identifies your assets and liabilities.

The first step in financial planning is to:

You are solvent if your:

A cash budget will have value only if it is actually used and:

Construct a balance sheet using the following information. Be sure the format is correct. (Show all work.)

_____ is an example of personal property.

Total assets on your balance sheet are $6,000 and liabilities are $2,000. Your solvency ratio will be:

Amit lists his gross salary in the income portion of his income and expense statement, and he includes his income taxes and Social Security taxes in the expenses portion.

Your car has a market value of $4,000, while the balance of the loan against it is now $2,500. Your ownership interest in the car is:

The Flemings will need $80,000 annually for 20 years during their retirement. How much will they have at retirement if they can earn a 4% rate of interest on their investment?

The income and expense statement measures your financial:

A cash budget has value only if you use it, and you keep careful records of actual income and expenses.

Which of the following is one of the three stages in preparing a cash budget?

Michael and Sandy purchased a home for $100,000 5 years ago. If its value appreciated at 6% annually, what is it worth today? (Round the answer to the nearest dollar.)

An income statement includes:

A balance sheet provides a statement of one's financial:

There is a need for budget adjustments when:

Net income should be used when preparing an income and expense statement.

______ is the most preferred way for one to deal with budget deficits.

Investment assets are required to :

Which of the following statements regarding a budget is true?

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

The first step in financial planning is to:

You are solvent if your:

A cash budget will have value only if it is actually used and:

Construct a balance sheet using the following information. Be sure the format is correct. (Show all work.)

_____ is an example of personal property.

Total assets on your balance sheet are $6,000 and liabilities are $2,000. Your solvency ratio will be:

Amit lists his gross salary in the income portion of his income and expense statement, and he includes his income taxes and Social Security taxes in the expenses portion.

Your car has a market value of $4,000, while the balance of the loan against it is now $2,500. Your ownership interest in the car is:

The Flemings will need $80,000 annually for 20 years during their retirement. How much will they have at retirement if they can earn a 4% rate of interest on their investment?

The income and expense statement measures your financial:

A cash budget has value only if you use it, and you keep careful records of actual income and expenses.

Which of the following is one of the three stages in preparing a cash budget?

Michael and Sandy purchased a home for $100,000 5 years ago. If its value appreciated at 6% annually, what is it worth today? (Round the answer to the nearest dollar.)

An income statement includes:

A balance sheet provides a statement of one's financial:

There is a need for budget adjustments when:

Net income should be used when preparing an income and expense statement.

______ is the most preferred way for one to deal with budget deficits.

Investment assets are required to :

Which of the following statements regarding a budget is true?

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