Exam 2: Using Financial Statements and Budgets

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The short-term goals you put into your financial plan [will | will not] affect the achievement of long-term goals.

If your ____,your net worth on the balance sheet would have increased from one period to the next.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -When your assets exceed your liabilities,you are [saving | solvent].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Personal financial software is mostly available for [free | a fee].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Total assets on your balance sheet are $6,000 and liabilities are $2,000.Your solvency ratio would be [67% | 33%].

If you obtain a loan to purchase a car in June,this loan amount would be included as income for June.

Your net worth and your equity in owned assets are the same basic concept.

When a cash surplus exists on your income and expenditure statements,you can

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

A(n)____ would not be listed as an asset on your balance sheet.

I should not record ____ on an income/expense statement covering January 1 to June 30.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A [savings account | retirement account] would be an example of a liquid asset.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -If you liquidate assets or borrow to make your budget balance,this will [increase | decrease] your net worth.

All of the following are stages in preparing a cash budget except:

The Flemings will need $80,000 annually for 20 years during retirement.How much will they need at retirement if they can earn a 4% rate of return?

Balance sheets and income statements are most useful if prepared at least annually.

The balance sheet equation is:

Elena purchased a stamp collection for $5,000 thirty years ago.If it appreciated 8% annually,what is it worth today?

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 are their long-term liabilities?

Mary and Tom purchased their home for $150,000,and it is now worth $175,000.Its asset value is $150,000.