Question 1

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

Question 2

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 3

An individual is said to have a balanced budget when his or her total income for the year equals or exceeds his or her total expenditures for the year.

Accepted Answer

A) True 
 B)False

Question 4

When Phil lists his house on his balance sheet,he should record its:

Accepted Answer

A) actual purchase price. 
B) depreciated value. 
C) insured value. 
D) deferred price. 
E) fair market value. 
A) actual purchase price. 
B) depreciated value. 
C) insured value. 
D) deferred price. 
E) fair market value.

Question 5

Estimating expenses using actual expenses from previous years and tracking current expenses make the task of preparing a cash budget easier.

Accepted Answer

A) True 
 B)False

Question 6

An individual can maintain his or her personal financial statements using spreadsheet software.

Accepted Answer

A) True 
 B)False

Question 7

If an individual lists his or her gross salary in the income portion of the budget,the expenditures section will include income taxes and social security taxes.

Accepted Answer

A) True 
 B)False

Question 8

Jean and Jim have liquid assets of $3,600 and other assets of $42,800.Their total liabilities equal $26,000.What is their net worth? (Show all work.)

Accepted Answer

Net worth = Total as

Question 9

A budget helps in:

Accepted Answer

A) setting financial goals. 
B) calculating discounted cash flows. 
C) giving feedback on the progress of the set plan. 
D) monitoring and controlling spending. 
E) revising depreciation schedules. 
A) setting financial goals. 
B) calculating discounted cash flows. 
C) giving feedback on the progress of the set plan. 
D) monitoring and controlling spending. 
E) revising depreciation schedules.

Question 10

Inflation is expected to be 4% in the coming year.If Mr.Gonza earned $37,000 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 4% in th

Question 11

Which of the following is a stage 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 12

Once you define your ____________ financial goals,you can prepare a cash budget for the upcoming year. ​

Accepted Answer

A) semi-annual 
B) short-term 
C) quarterly 
D) long-term 
A) semi-annual 
B) short-term 
C) quarterly 
D) long-term

Question 13

Jamil invested $9,500 in an account he expects will earn 5% annually.Approximately how many years will it take for the account to double in value? (Round off your answer to one decimal place.)

Accepted Answer

A) 8.8 
B) 9.7 
C) 10.8 
D) 11.4 
E) 14.2 
A) 8.8 
B) 9.7 
C) 10.8 
D) 11.4 
E) 14.2

Question 14

A budget is a financial report that forecasts an individual's current income as a percentage of his or her past earnings.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) annual credit obligations 
B) future years' credit obligations 
C) long-term credit obligations 
D) potential credit obligations 
A) annual credit obligations 
B) future years' credit obligations 
C) long-term credit obligations 
D) potential credit obligations

Question 16

Your investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years.If you require a 7% return,what is the most you should pay for this investment?

Accepted Answer

A) $49,179 
B) $175,590 
C) $201,000 
D) $225,682 
E) $250,000 
A) $49,179 
B) $175,590 
C) $201,000 
D) $225,682 
E) $250,000

Question 17

Which of the following is true of an individual's income and expense statement?

Accepted Answer

A) An individual's income and expense statement describes his or her financial position at a given point in time. 
B) An individual's income and expense statement measures his or her financial performance at a given point in time. 
C) An individual's income and expense statement describes his or her financial goals over a specific period of time. 
D) An individual's income and expense statement measures his or her financial performance over a period of time. 
E) An individual's income and expense statement describes his or her financial position over a period of time. 
A) An individual's income and expense statement describes his or her financial position at a given point in time. 
B) An individual's income and expense statement measures his or her financial performance at a given point in time. 
C) An individual's income and expense statement describes his or her financial goals over a specific period of time. 
D) An individual's income and expense statement measures his or her financial performance over a period of time. 
E) An individual's income and expense statement describes his or her financial position over a period of time.

Question 18

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

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 19

What can you do if your budget shows an annual budget deficit?

Accepted Answer

A) You can liquidate investments to meet the total budget shortfall for the year. 
B) You can increase low-priority expenses on the budget. 
C) You can invest more in real estate/personal estate. 
D) You can discourage borrowing. 
E) You can shift expenses from the surplus months to the deficit months. 
A) You can liquidate investments to meet the total budget shortfall for the year. 
B) You can increase low-priority expenses on the budget. 
C) You can invest more in real estate/personal estate. 
D) You can discourage borrowing. 
E) You can shift expenses from the surplus months to the deficit months.

Question 20

The Harts spend 30% of their disposable income on housing,5% on medical expenses,25% on food,10% on clothing,14% on loan repayments,and 8% on entertainment.How much of their disposable income is available for saving and investment? (Show all work.)

Accepted Answer

The disposable income is 100%.The total

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

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.)

An individual is said to have a balanced budget when his or her total income for the year equals or exceeds his or her total expenditures for the year.

When Phil lists his house on his balance sheet,he should record its:

Estimating expenses using actual expenses from previous years and tracking current expenses make the task of preparing a cash budget easier.

An individual can maintain his or her personal financial statements using spreadsheet software.

If an individual lists his or her gross salary in the income portion of the budget,the expenditures section will include income taxes and social security taxes.

Jean and Jim have liquid assets of $3,600 and other assets of $42,800.Their total liabilities equal $26,000.What is their net worth? (Show all work.)

A budget helps in:

Inflation is expected to be 4% in the coming year.If Mr.Gonza earned $37,000 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.)

Which of the following is a stage in preparing a cash budget?

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

Jamil invested $9,500 in an account he expects will earn 5% annually.Approximately how many years will it take for the account to double in value? (Round off your answer to one decimal place.)

A budget is a financial report that forecasts an individual's current income as a percentage of his or her past earnings.

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

Your investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years.If you require a 7% return,what is the most you should pay for this investment?

Which of the following is true of an individual's income and expense statement?

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

What can you do if your budget shows an annual budget deficit?

The Harts spend 30% of their disposable income on housing,5% on medical expenses,25% on food,10% on clothing,14% on loan repayments,and 8% on entertainment.How much of their disposable income is available for saving and investment? (Show all work.)

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

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.)

An individual is said to have a balanced budget when his or her total income for the year equals or exceeds his or her total expenditures for the year.

When Phil lists his house on his balance sheet,he should record its:

Estimating expenses using actual expenses from previous years and tracking current expenses make the task of preparing a cash budget easier.

An individual can maintain his or her personal financial statements using spreadsheet software.

If an individual lists his or her gross salary in the income portion of the budget,the expenditures section will include income taxes and social security taxes.

Jean and Jim have liquid assets of $3,600 and other assets of $42,800.Their total liabilities equal $26,000.What is their net worth? (Show all work.)

A budget helps in:

Inflation is expected to be 4% in the coming year.If Mr.Gonza earned $37,000 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.)

Which of the following is a stage in preparing a cash budget?

Once you define your ____________ financial goals,you can prepare a cash budget for the upcoming year. ​

Jamil invested $9,500 in an account he expects will earn 5% annually.Approximately how many years will it take for the account to double in value? (Round off your answer to one decimal place.)

A budget is a financial report that forecasts an individual's current income as a percentage of his or her past earnings.

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

Your investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years.If you require a 7% return,what is the most you should pay for this investment?

Which of the following is true of an individual's income and expense statement?

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

What can you do if your budget shows an annual budget deficit?

The Harts spend 30% of their disposable income on housing,5% on medical expenses,25% on food,10% on clothing,14% on loan repayments,and 8% on entertainment.How much of their disposable income is available for saving and investment? (Show all work.)

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

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

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