Question 1

The income and expense statement examines your financial:

Accepted Answer

A) obligations. 
B) performance. 
C) position. 
D) assets. 
E) objectives. 
A) obligations. 
B) performance. 
C) position. 
D) assets. 
E) objectives. B

Question 2

The preparation of an income and expense statement is the first step in the personal financial planning process.

Accepted Answer

A) True 
 B)False  False

Question 3

____________ are difficult to estimate for an upcoming year. ​

Accepted Answer

A) Interest payments 
B) Medical expenses 
C) Rent payments 
D) Insurance expenses 
A) Interest payments 
B) Medical expenses 
C) Rent payments 
D) Insurance expenses B

Question 4

Sam and his wife Ann purchased a home in Lubbock,Texas,in 1980 for $100,000.Their original home mortgage payment was $90,000.The house has a current market value of $175,000 and a replacement value of $200,000.They still owe $55,000 of their home mortgage payment.In their current balance sheet,their home will be reflected as:

Accepted Answer

A) a $200,000 asset for the replacement value and a $55,000 liability for the outstanding mortgage. 
B) a $200,000 asset for the replacement value and a $90,000 liability for the original mortgage. 
C) a $175,000 asset for the market value and a $55,000 liability for the outstanding mortgage. 
D) a $175,000 asset for the market value and a $90,000 liability for the original mortgage. 
E) a $100,000 asset for the purchase price and a $55,000 liability for the outstanding mortgage. 
A) a $200,000 asset for the replacement value and a $55,000 liability for the outstanding mortgage. 
B) a $200,000 asset for the replacement value and a $90,000 liability for the original mortgage. 
C) a $175,000 asset for the market value and a $55,000 liability for the outstanding mortgage. 
D) a $175,000 asset for the market value and a $90,000 liability for the original mortgage. 
E) a $100,000 asset for the purchase price and a $55,000 liability for the outstanding mortgage.

Question 5

You bought a $500 stereo on an installment plan and made two payments of $75 each during the year.On your income and expense statement for the year,you will show an expense of ____________. ​

Accepted Answer

A) $150 
B) $575 
C) $650 
D) $500 
A) $150 
B) $575 
C) $650 
D) $500

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) 65% 
A) 30% 
B) 33% 
C) 67% 
D) 65%

Question 7

The three parts of an individual's balance sheet are his or her:

Accepted Answer

A) income,liabilities,and net worth. 
B) assets,expenditures,and net worth. 
C) assets,liabilities,and expenses. 
D) assets,liabilities,and net worth. 
E) income,liabilities,and assets. 
A) income,liabilities,and net worth. 
B) assets,expenditures,and net worth. 
C) assets,liabilities,and expenses. 
D) assets,liabilities,and net worth. 
E) income,liabilities,and assets.

Question 8

Which of the following is true of budgets?

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 9

Loans should be recorded as a liability on the balance sheet at their:

Accepted Answer

A) original outstanding balance. 
B) year-end outstanding balance. 
C) average outstanding balance. 
D) current outstanding balance. 
E) beginning outstanding balance. 
A) original outstanding balance. 
B) year-end outstanding balance. 
C) average outstanding balance. 
D) current outstanding balance. 
E) beginning outstanding balance.

Question 10

The total amount of salary you earn before taxes are deducted is your ____________. ​

Accepted Answer

A) gross pay 
B) after-tax salary 
C) take-home salary 
D) net pay 
A) gross pay 
B) after-tax salary 
C) take-home salary 
D) net pay

Question 11

Construct a balance sheet using the following information.Be sure the format is correct.(Show all work.)
 $$\begin{array} { | l | l | } 
\hline \text { Cash on hand } & \$ 75 \
\hline \text { Bank credit card balance } & 1,200 \
\hline \text { Utility bill (overdue) } & 100 \
\hline \text { Auto loan balance } & 3,500 \
\hline \text { Mortgage } & 75,000 \
\hline \text { Primary residence } & 105,000 \
\hline \text { Jewelry } & 2,000 \
\hline \text { Stocks } & 17,500 \
\hline \text { Coin collection } & 2,500 \
\hline 2001 \text { Toyota } & 7,500 \
\hline
\end{array}$$

Accepted Answer

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

Question 12

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 13

Payments made on your loan obligations should ____________ your net worth. ​

Accepted Answer

A) increase 
B) decrease 
C) maintain 
D) eliminate 
A) increase 
B) decrease 
C) maintain 
D) eliminate

Question 14

A balance sheet provides a statement of one's financial ____________. ​

Accepted Answer

A) position 
B) performance 
C) goals 
D) ratios 
A) position 
B) performance 
C) goals 
D) ratios

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

It is best to prepare an individual's personal financial statements at least once a year,ideally when drawing up his or her budget.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an example of real property?

Accepted Answer

A) Machinery 
B) A computer 
C) An automobile 
D) A garage 
E) Office furniture 
A) Machinery 
B) A computer 
C) An automobile 
D) A garage 
E) Office furniture

Question 18

A detailed forecast used to monitor and control expenses is called a(n)____________. ​

Accepted Answer

A) balance sheet 
B) profit and loss account 
C) budget 
D) income and expense statement 
A) balance sheet 
B) profit and loss account 
C) budget 
D) income and expense statement

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

_____ 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

The income and expense statement examines your financial:

The preparation of an income and expense statement is the first step in the personal financial planning process.

____________ are difficult to estimate for an upcoming year.

You bought a $500 stereo on an installment plan and made two payments of $75 each during the year.On your income and expense statement for the year,you will show an expense of ____________.

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

The three parts of an individual's balance sheet are his or her:

Which of the following is true of budgets?

Loans should be recorded as a liability on the balance sheet at their:

The total amount of salary you earn before taxes are deducted is your ____________.

You are solvent if your:

Payments made on your loan obligations should ____________ your net worth.

A balance sheet provides a statement of one's financial ____________.

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

It is best to prepare an individual's personal financial statements at least once a year,ideally when drawing up his or her budget.

Which of the following is an example of real property?

A detailed forecast used to monitor and control expenses is called a(n)____________.

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

_____ is an example of personal property.

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, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 2: Using Financial Statements and Budgets

The income and expense statement examines your financial:

The preparation of an income and expense statement is the first step in the personal financial planning process.

____________ are difficult to estimate for an upcoming year. ​

You bought a $500 stereo on an installment plan and made two payments of $75 each during the year.On your income and expense statement for the year,you will show an expense of ____________. ​

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

The three parts of an individual's balance sheet are his or her:

Which of the following is true of budgets?

Loans should be recorded as a liability on the balance sheet at their:

The total amount of salary you earn before taxes are deducted is your ____________. ​

You are solvent if your:

Payments made on your loan obligations should ____________ your net worth. ​

A balance sheet provides a statement of one's financial ____________. ​

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

It is best to prepare an individual's personal financial statements at least once a year,ideally when drawing up his or her budget.

Which of the following is an example of real property?

A detailed forecast used to monitor and control expenses is called a(n)____________. ​

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

_____ is an example of personal property.

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, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

____________ are difficult to estimate for an upcoming year.

You bought a $500 stereo on an installment plan and made two payments of $75 each during the year.On your income and expense statement for the year,you will show an expense of ____________.

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

The total amount of salary you earn before taxes are deducted is your ____________.

Payments made on your loan obligations should ____________ your net worth.

A balance sheet provides a statement of one's financial ____________.

A detailed forecast used to monitor and control expenses is called a(n)____________.