Exam 3: Financial Statements,tools,and Budgets

When setting up your budget for the month,it is useful to use prior months' cash-flow statements to set your estimates for income and spending for the upcoming month.

Disposable personal income is the amount of take-home pay remaining after all deductions are withheld for taxes,insurance,and union dues.

A budget variance is the difference between the amount budgeted and the actual amount spent or received.

Households dependent on the income from a self-employed person may need a larger emergency cash reserve than others.

The strictest method of controlling budgets is​

Keeping good records is a prerequisite for effective financial planning.

Values are​

NARRBEGIN: Figure 3-1 Figure 3-1 Maria and John Sanchez have just completed their third annual set of financial statements.They met in a personal finance class while in college and still remember their instructor's advice regarding the importance of knowing their financial condition and progress.Even before they got married,they decided that each year on February 2 (Groundhog Day)they would update their cash-flow statement and their balance sheet. ​ The following information is taken from their latest financial statements: ​​ -Refer to Figure 3-1.Calculate Maria and John's investment assets-to-total assets ratio.

Matthew is concerned about his ability to save money regularly and has prepared a budget.Which of the following budget classifications would be most appropriate for Matthew's budget?​

Monetary assets include cash and near-cash items that can be readily converted to cash.

Financial planning is the process of developing and implementing short-term plans to achieve financial objectives.

It is usually easy to reduce a fixed expense.

Which of the following is classified as a tangible asset?​

You can use the liquidity ratio to determine the number of months that you could continue to meet your expenses using only your monetary assets should all income cease.

A balance sheet shows flows of income in and expenses out of your finances for a given period of time.

Mack and Amy are making regular contributions of $200 a month from their salaries to a money market savings account.These transactions will​

The process of recording the sources and amounts of dollars earned and spent is called​

Jason and Larissa would like to accumulate three times their monthly expenses in monetary assets.They currently have $2,800 in their money market account,and their monthly expenses are $4,500.How much more do they need in their money market account to reach their goal?​

NARRBEGIN: Figure 3-1 Figure 3-1 Maria and John Sanchez have just completed their third annual set of financial statements.They met in a personal finance class while in college and still remember their instructor's advice regarding the importance of knowing their financial condition and progress.Even before they got married,they decided that each year on February 2 (Groundhog Day)they would update their cash-flow statement and their balance sheet. ​ The following information is taken from their latest financial statements: ​​ -Refer to Figure 3-1.Calculate and evaluate Maria and John's debt -to-income ratio.

Which of the following types of assets is primarily used for emergencies,maintenance of living expenses,savings,and payment of bills?​