Question 1

It is recommended that an individual maintains a ledger to summarize all of his or her financial transactions.

Accepted Answer

A) True 
 B)False

Question 2

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 3

A ____________is an example of a liquid asset. ​

Accepted Answer

A) fixed deposit of three years 
B) savings account 
C) recurring deposit of two years 
D) retirement account 
A) fixed deposit of three years 
B) savings account 
C) recurring deposit of two years 
D) retirement account

Question 4

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 5

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 6

A balance sheet describes a person's:

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 7

I should record _____ on my income and expense statement for the period of January 1 to June 30.

Accepted Answer

A) an $800 refrigerator I bought on credit on May 30 
B) an outstanding education loan account 
C) jewelry I purchased with an arrangement to pay later 
D) my checking account balance 
E) the groceries I bought and paid for in June 
A) an $800 refrigerator I bought on credit on May 30 
B) an outstanding education loan account 
C) jewelry I purchased with an arrangement to pay later 
D) my checking account balance 
E) the groceries I bought and paid for in June

Question 8

Which of the following is true of a budget?

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 forecast. 
E) It is a set of personal financial objectives. 
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 forecast. 
E) It is a set of personal financial objectives.

Question 9

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

Accepted Answer

A) Liquidating one's savings and investments 
B) Borrowing money from one's relatives 
C) Cutting one's low-priority expenses 
D) Increasing one's income 
A) Liquidating one's savings and investments 
B) Borrowing money from one's relatives 
C) Cutting one's low-priority expenses 
D) Increasing one's income

Question 10

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

Question 11

The Hamptons want to have $1,750,000 for their retirement in 30 years.How much should they save annually if they expect to earn 8% on their investments?

Accepted Answer

The future value that the Hamptons want

Question 12

When your liabilities exceed your assets,you are ____________. ​

Accepted Answer

A) solvent 
B) financially sound 
C) retired 
D) insolvent 
A) solvent 
B) financially sound 
C) retired 
D) insolvent

Question 13

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. 
A) be used in our everyday lives. 
B) increase productivity. 
C) provide a service. 
D) earn a return.

Question 14

An inability to reach short-term goals will significantly affect one's ability to reach long-term goals.

Accepted Answer

A) True 
 B)False

Question 15

The best way to balance one's budget is to increase borrowing.

Accepted Answer

A) True 
 B)False

Question 16

Net income (after taxes)should be used when preparing an income and expense statement.

Accepted Answer

A) True 
 B)False

Question 17

Annual budgets help in monitoring and controlling income,living expenses,purchases,and savings on:

Accepted Answer

A) a weekly basis. 
B) a yearly basis. 
C) a quarterly basis. 
D) a semi-annually basis. 
E) a monthly basis. 
A) a weekly basis. 
B) a yearly basis. 
C) a quarterly basis. 
D) a semi-annually basis. 
E) a monthly basis.

Question 18

In a budget,"fun money" is for family members to spend as they like without having to account for how it is spent.

Accepted Answer

A) True 
 B)False

Question 19

If your total assets equal $87,000 and your total liabilities equal $10,000,your solvency ratio is:

Accepted Answer

A) 11.5%. 
B) 13.0%. 
C) 77.0%. 
D) 87.0%. 
E) 88.5%. 
A) 11.5%. 
B) 13.0%. 
C) 77.0%. 
D) 87.0%. 
E) 88.5%.

Question 20

Jacques's total monthly loan payments amount to $1,020,while his gross income is $3,000 per month.What is his debt service ratio?

Accepted Answer

A) 34% 
B) 43% 
C) 50% 
D) 75% 
E) 82% 
A) 34% 
B) 43% 
C) 50% 
D) 75% 
E) 82%

It is recommended that an individual maintains a ledger to summarize all of his or her financial transactions.

An income statement includes:

A ____________is an example of a liquid asset.

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

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.)

A balance sheet describes a person's:

I should record _____ on my income and expense statement for the period of January 1 to June 30.

Which of the following is true of a budget?

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

The first step in financial planning is to ____________.

The Hamptons want to have $1,750,000 for their retirement in 30 years.How much should they save annually if they expect to earn 8% on their investments?

When your liabilities exceed your assets,you are ____________.

Investment assets are required to ____________.

An inability to reach short-term goals will significantly affect one's ability to reach long-term goals.

The best way to balance one's budget is to increase borrowing.

Net income (after taxes)should be used when preparing an income and expense statement.

Annual budgets help in monitoring and controlling income,living expenses,purchases,and savings on:

In a budget,"fun money" is for family members to spend as they like without having to account for how it is spent.

If your total assets equal $87,000 and your total liabilities equal $10,000,your solvency ratio is:

Jacques's total monthly loan payments amount to $1,020,while his gross income is $3,000 per month.What is his debt service ratio?

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

It is recommended that an individual maintains a ledger to summarize all of his or her financial transactions.

An income statement includes:

A ____________is an example of a liquid asset. ​

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

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.)

A balance sheet describes a person's:

I should record _____ on my income and expense statement for the period of January 1 to June 30.

Which of the following is true of a budget?

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

The first step in financial planning is to ____________. ​

The Hamptons want to have $1,750,000 for their retirement in 30 years.How much should they save annually if they expect to earn 8% on their investments?

When your liabilities exceed your assets,you are ____________. ​

Investment assets are required to ____________. ​

An inability to reach short-term goals will significantly affect one's ability to reach long-term goals.

The best way to balance one's budget is to increase borrowing.

Net income (after taxes)should be used when preparing an income and expense statement.

Annual budgets help in monitoring and controlling income,living expenses,purchases,and savings on:

In a budget,"fun money" is for family members to spend as they like without having to account for how it is spent.

If your total assets equal $87,000 and your total liabilities equal $10,000,your solvency ratio is:

Jacques's total monthly loan payments amount to $1,020,while his gross income is $3,000 per month.What is his debt service ratio?

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

A ____________is an example of a liquid asset.

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

The first step in financial planning is to ____________.

When your liabilities exceed your assets,you are ____________.

Investment assets are required to ____________.