Question 1

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 2

Once you define your _____   financial goals, you can prepare a cash budget for the coming 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 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
A(n) [ mutual fund | annuity ] is a fixed sum of money that occurs every period.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 4

Rosa and Jose have liquid assets of $5,000 and other assets of $50,000. Their total liabilities equal $26,000. What is their net worth? (Show all work.)

Accepted Answer

Net Worth = Total As

Question 5

The liquidity ratio is designed to show the percentage of _____  you can cover with your current liquid assets.

Accepted Answer

A)  current debts 
B)  current expenses 
C)  long-term debts 
D)  planned savings 
E)  planned purchases 
A)  current debts 
B)  current expenses 
C)  long-term debts 
D)  planned savings 
E)  planned purchases

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
[ Financial plans  | Budgets ] describe financial goals and provide the action plans to their achievement.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 7

Assume that your total income for the current year is $35,000. Your total expenses, including taxes of $5,000, are $30,000. Your savings ratio is:

Accepted Answer

A)  7.5%. 
B)  10.0%. 
C)  12.5%. 
D)  13.3%. 
E)  16.7%. 
A)  7.5%. 
B)  10.0%. 
C)  12.5%. 
D)  13.3%. 
E)  16.7%.

Question 8

A savings ratio calculated from an income and expense statement represents the:

Accepted Answer

A)  percentage of gross income saved. 
B)  ability to cover immediate debt when there is an interruption in income. 
C)  percentage of after-tax income saved. 
D)  percentage of tax-deferred income earned annually. 
E)  percentage of asset value salvaged. 
A)  percentage of gross income saved. 
B)  ability to cover immediate debt when there is an interruption in income. 
C)  percentage of after-tax income saved. 
D)  percentage of tax-deferred income earned annually. 
E)  percentage of asset value salvaged.

Question 9

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
[ Present | Future ] value is the value today of an amount to be received in the future.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
The [ nominal | real ] rate of return is the rate of return earned after adjusting for the effect of inflation.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 11

A detailed financial report used to monitor and control expenses is called a(n):

Accepted Answer

A)  balance sheet. 
B)  profit and loss statement. 
C)  budget. 
D)  income and expense statement. 
E)  cash inflow. 
A)  balance sheet. 
B)  profit and loss statement. 
C)  budget. 
D)  income and expense statement. 
E)  cash inflow.

Question 12

The cash budget preparation process has four stages: forecasting income, forecasting expenses, categorizing expenses, and making adjustments.

Accepted Answer

A) True 
 B)False

Question 13

The balance sheet shows an individual's financial condition as of the time the statement is prepared.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Your _____ is an example of a liquid asset.

Accepted Answer

A)  home 
B)  car 
C)  checking account 
D)  charge account 
E)  life insurance cash value 
A)  home 
B)  car 
C)  checking account 
D)  charge account 
E)  life insurance cash value

Question 16

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 17

The best approach to solve the problem of an annual budget deficit is to:

Accepted Answer

A)  liquidate more assets than required to meet the total budget shortfall for the year. 
B)  borrow funds on credit cards. 
C)  reduce flexible expenses for nonessential items. 
D)  reduce fixed expenses. 
E)  reduce high-priority expenses on the budget. 
A)  liquidate more assets than required to meet the total budget shortfall for the year. 
B)  borrow funds on credit cards. 
C)  reduce flexible expenses for nonessential items. 
D)  reduce fixed expenses. 
E)  reduce high-priority expenses on the budget.

Question 18

Financial planning is necessary only if an individual earns a lot of money.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
A personal balance sheet provides a statement of your financial [ position | performance ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

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

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. A(n) [ mutual fund | annuity ] is a fixed sum of money that occurs every period.

Rosa and Jose have liquid assets of $5,000 and other assets of $50,000. Their total liabilities equal $26,000. What is their net worth? (Show all work.)

The liquidity ratio is designed to show the percentage of _____ you can cover with your current liquid assets.

Assume that your total income for the current year is $35,000. Your total expenses, including taxes of $5,000, are $30,000. Your savings ratio is:

A savings ratio calculated from an income and expense statement represents the:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. [ Present | Future ] value is the value today of an amount to be received in the future.

A detailed financial report used to monitor and control expenses is called a(n):

The cash budget preparation process has four stages: forecasting income, forecasting expenses, categorizing expenses, and making adjustments.

The balance sheet shows an individual's financial condition as of the time the statement is prepared.

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

Your _____ is an example of a liquid asset.

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.)

The best approach to solve the problem of an annual budget deficit is to:

Financial planning is necessary only if an individual earns a lot of money.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. A personal balance sheet provides a statement of your financial [ position | performance ].

Understanding the Financial Planning 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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 2: Developing Your Financial Statements and Plans

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

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. A(n) [ mutual fund | annuity ] is a fixed sum of money that occurs every period.

Rosa and Jose have liquid assets of $5,000 and other assets of $50,000. Their total liabilities equal $26,000. What is their net worth? (Show all work.)

The liquidity ratio is designed to show the percentage of _____ you can cover with your current liquid assets.

Assume that your total income for the current year is $35,000. Your total expenses, including taxes of $5,000, are $30,000. Your savings ratio is:

A savings ratio calculated from an income and expense statement represents the:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. [ Present | Future ] value is the value today of an amount to be received in the future.

A detailed financial report used to monitor and control expenses is called a(n):

The cash budget preparation process has four stages: forecasting income, forecasting expenses, categorizing expenses, and making adjustments.

The balance sheet shows an individual's financial condition as of the time the statement is prepared.

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

Your _____ is an example of a liquid asset.

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.)

The best approach to solve the problem of an annual budget deficit is to:

Financial planning is necessary only if an individual earns a lot of money.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. A personal balance sheet provides a statement of your financial [ position | performance ].

Understanding the Financial Planning 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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters