Question 1

Knowing how to prepare and interpret personal financial statements is a cornerstone of personal financial planning.

Accepted Answer

A) True 
 B)False

Question 2

A(n)____________ is an example of a current liability. ​

Accepted Answer

A) auto loan 
B) credit card balance 
C) mortgage 
D) education loan 
A) auto loan 
B) credit card balance 
C) mortgage 
D) education loan

Question 3

Construct a balance sheet using the following information.Be sure the format is correct.(Show all work.)
 $$\begin{array} { | l | l | } 
\hline \text { Cash on hand } & \$ 500 \
\hline \text { Bank credit card balance } & 750 \
\hline \text { Taxes due } & 500 \
\hline \text { Utility bills (overdue) } & 120 \
\hline \text { Auto loan balance } & 6,000 \
\hline \text { Mortgage } & 45,000 \
\hline \text { Primary residence } & 60,000 \
\hline \text { Jewelry } & 1,200 \
\hline \text { Stocks } & 6,000 \
\hline \text { Coin collection } & 2,500 \
\hline \text { 2001 Toyota } & 7,500 \
\hline \text { Auto payment } & 250 \
\hline
\end{array}$$

Accepted Answer

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

Question 4

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 5

Which of the following is listed as an asset on an individual's balance sheet?

Accepted Answer

A) Bank credit card balances 
B) Education loans 
C) Outstanding medical bills 
D) Checking accounts 
E) Leased automobiles 
A) Bank credit card balances 
B) Education loans 
C) Outstanding medical bills 
D) Checking accounts 
E) Leased automobiles

Question 6

Sonny and Cher have a net worth of $35,000 and total assets of $200,000.If their revolving credit and unpaid bills total $2,200,what will their long-term liabilities be?

Accepted Answer

A) $115,000 
B) $140,000 
C) $142,200 
D) $162,800 
E) $165,000 
A) $115,000 
B) $140,000 
C) $142,200 
D) $162,800 
E) $165,000

Question 7

Theresa invested $5,000 in an account she expects will earn 7% annually.Approximately how many years will it take for the account to double in value? (Round the number of years to the nearest whole number.)

Accepted Answer

A) 8 
B) 9 
C) 10 
D) 11 
E) 12 
A) 8 
B) 9 
C) 10 
D) 11 
E) 12

Question 8

Phil has $2,000,and he needs it to grow to $4,000 in 8 years.Assuming he does not add any more money to this fund,what rate of interest would he need to earn? (Round off the rate of interest to the nearest whole number.)

Accepted Answer

A) 6% 
B) 7% 
C) 8% 
D) 9% 
E) 10% 
A) 6% 
B) 7% 
C) 8% 
D) 9% 
E) 10%

Question 9

Future value calculations to estimate the funds needed to meet a goal take compounding into account.

Accepted Answer

A) True 
 B)False

Question 10

If your budget shows a deficit,you are required to ____________ to balance your budget. ​

Accepted Answer

A) increase your savings 
B) increase your income 
C) increase your expenses 
D) increase your investments 
A) increase your savings 
B) increase your income 
C) increase your expenses 
D) increase your investments

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

_____ will be listed as a liability on your balance sheet.

Accepted Answer

A) A money market deposit account 
B) A checking account 
C) Equipment 
D) The cash value of a life insurance policy 
E) An education loan 
A) A money market deposit account 
B) A checking account 
C) Equipment 
D) The cash value of a life insurance policy 
E) An education loan

Question 13

Which of the following is true of an individual's net worth?

Accepted Answer

A) It is the sum of an individual's current assets and his or her current liabilities. 
B) It is the sum of an individual's take-home pay and his or her payroll taxes. 
C) It is the difference between an individual's current assets and his or her current liabilities. 
D) It is the difference between an individual's monthly income and his or her expenses. 
E) It is the difference between an individual's total assets and his or her total liabilities. 
A) It is the sum of an individual's current assets and his or her current liabilities. 
B) It is the sum of an individual's take-home pay and his or her payroll taxes. 
C) It is the difference between an individual's current assets and his or her current liabilities. 
D) It is the difference between an individual's monthly income and his or her expenses. 
E) It is the difference between an individual's total assets and his or her total liabilities.

Question 14

Assume that your total income for the current year is $35,000.Your total expenses including taxes of $5,000 is $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 15

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 16

If your statement of income and expense prepared on a cash basis shows a deficit,you have:

Accepted Answer

A) increased your debts. 
B) liquidated your investments. 
C) increased your savings. 
D) taken a cash loan on your insurance. 
E) sold some securities. 
A) increased your debts. 
B) liquidated your investments. 
C) increased your savings. 
D) taken a cash loan on your insurance. 
E) sold some securities.

Question 17

A cash budget has value only if one uses it,reviews it regularly,and keeps careful records of income and expenses.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true of budgets?

Accepted Answer

A) Budgets are meant for poor people only. 
B) Budgets need expensive software to be effective. 
C) Budgets are forward looking. 
D) Budgets are permanent. 
E) Budgets are unnecessary. 
A) Budgets are meant for poor people only. 
B) Budgets need expensive software to be effective. 
C) Budgets are forward looking. 
D) Budgets are permanent. 
E) Budgets are unnecessary.

Question 19

The process of finding present value is called ____________. ​

Accepted Answer

A) discounting 
B) calculating 
C) compounding 
D) computing 
A) discounting 
B) calculating 
C) compounding 
D) computing

Question 20

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

Accepted Answer

A) True 
 B)False

Knowing how to prepare and interpret personal financial statements is a cornerstone of personal financial planning.

A(n)____________ is an example of a current liability.

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

Which of the following is listed as an asset on an individual's balance sheet?

Sonny and Cher have a net worth of $35,000 and total assets of $200,000.If their revolving credit and unpaid bills total $2,200,what will their long-term liabilities be?

Theresa invested $5,000 in an account she expects will earn 7% annually.Approximately how many years will it take for the account to double in value? (Round the number of years to the nearest whole number.)

Phil has $2,000,and he needs it to grow to $4,000 in 8 years.Assuming he does not add any more money to this fund,what rate of interest would he need to earn? (Round off the rate of interest to the nearest whole number.)

Future value calculations to estimate the funds needed to meet a goal take compounding into account.

If your budget shows a deficit,you are required to ____________ to balance your budget.

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

_____ will be listed as a liability on your balance sheet.

Which of the following is true of an individual's net worth?

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

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

If your statement of income and expense prepared on a cash basis shows a deficit,you have:

A cash budget has value only if one uses it,reviews it regularly,and keeps careful records of income and expenses.

Which of the following is true of budgets?

The process of finding present value is called ____________.

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

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

Knowing how to prepare and interpret personal financial statements is a cornerstone of personal financial planning.

A(n)____________ is an example of a current liability. ​

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

Which of the following is listed as an asset on an individual's balance sheet?

Sonny and Cher have a net worth of $35,000 and total assets of $200,000.If their revolving credit and unpaid bills total $2,200,what will their long-term liabilities be?

Theresa invested $5,000 in an account she expects will earn 7% annually.Approximately how many years will it take for the account to double in value? (Round the number of years to the nearest whole number.)

Phil has $2,000,and he needs it to grow to $4,000 in 8 years.Assuming he does not add any more money to this fund,what rate of interest would he need to earn? (Round off the rate of interest to the nearest whole number.)

Future value calculations to estimate the funds needed to meet a goal take compounding into account.

If your budget shows a deficit,you are required to ____________ to balance your budget. ​

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

_____ will be listed as a liability on your balance sheet.

Which of the following is true of an individual's net worth?

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

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

If your statement of income and expense prepared on a cash basis shows a deficit,you have:

A cash budget has value only if one uses it,reviews it regularly,and keeps careful records of income and expenses.

Which of the following is true of budgets?

The process of finding present value is called ____________. ​

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

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(n)____________ is an example of a current liability.

If your budget shows a deficit,you are required to ____________ to balance your budget.

The process of finding present value is called ____________.