Question 1

Dissavings can

Accepted Answer

A) decrease assets and net worth. 
B) decrease both assets and liabilities. 
C) decrease net worth only. 
D) decrease assets only or liabilities only. 
A) decrease assets and net worth. 
B) decrease both assets and liabilities. 
C) decrease net worth only. 
D) decrease assets only or liabilities only.

Question 2

Jan showed the following financial items in 2007 and 2008:
 
In relation to 2007's savings,Jan's savings in 2008

Accepted Answer

A) decreased by $800. 
B) decreased by $200. 
C) increased by $200. 
D) increased by $800. 
A) decreased by $800. 
B) decreased by $200. 
C) increased by $200. 
D) increased by $800.

Question 3

If your take-home pay is $30,000 annually and you have $15,000 in liquid assets and $5,000 in current liabilities,you have about

Accepted Answer

A) six months' of liquid reserves,which is good. 
B) two month's of liquid reserves,which is poor. 
C) four month's of liquid reserves,which is fair. 
D) six years of liquid reserves,which is excessive. 
A) six months' of liquid reserves,which is good. 
B) two month's of liquid reserves,which is poor. 
C) four month's of liquid reserves,which is fair. 
D) six years of liquid reserves,which is excessive.

Question 4

Two kinds of noncurrent liabilities are

Accepted Answer

A) deferred liabilities and rescheduled obligations. 
B) bills payable and credit card balances due. 
C) co-signor agreements and bankruptcy judgments. 
D) noncurrent portions of loans with repayment schedules and loans without repayment schedules. 
A) deferred liabilities and rescheduled obligations. 
B) bills payable and credit card balances due. 
C) co-signor agreements and bankruptcy judgments. 
D) noncurrent portions of loans with repayment schedules and loans without repayment schedules.

Question 5

Management by objective begins with setting goals.

Accepted Answer

A) True 
 B)False

Question 6

In preparing a balance sheet,you should list only those assets that you own outright;that is,free of debt.

Accepted Answer

A) True 
 B)False

Question 7

A simple yardstick to measure your annual income performance is to compare the annual inflation rate with your

Accepted Answer

A) percentage increase in nominal income. 
B) percentage increase in real income. 
C) percentage increase in nominal expenses. 
D) percentage increase in real expenses. 
A) percentage increase in nominal income. 
B) percentage increase in real income. 
C) percentage increase in nominal expenses. 
D) percentage increase in real expenses.

Question 8

Last year Ann Heuser's the rate of increase in her nominal income was equal to the rate of inflation;therefore,her real income remained unchanged.

Accepted Answer

A) True 
 B)False

Question 9

Coding income and expense accounts facilitates identifying and summing amounts at month's end.

Accepted Answer

A) True 
 B)False

Question 10

For purposes of annual budgeting,it is better to

Accepted Answer

A) express goals very broadly to allow for flexibility. 
B) ignore goals altogether and focus instead on savings. 
C) express income goals concretely and expense goals broadly;this usually assures adequate savings. 
D) express all goals concretely,which then reduces all goals to yearly consumption and savings targets. 
A) express goals very broadly to allow for flexibility. 
B) ignore goals altogether and focus instead on savings. 
C) express income goals concretely and expense goals broadly;this usually assures adequate savings. 
D) express all goals concretely,which then reduces all goals to yearly consumption and savings targets.

Question 11

Which of the following statements might be considered poor advice in budgeting?

Accepted Answer

A) Set realistic budget goals. 
B) Stick to simple procedures. 
C) Use the budget primarily as a record-keeping device. 
D) Use the budget to direct and control expenses. 
A) Set realistic budget goals. 
B) Stick to simple procedures. 
C) Use the budget primarily as a record-keeping device. 
D) Use the budget to direct and control expenses.

Question 12

Dody Sperber budgeted $80 a month for entertainment.The cumulative variance is an unfavorable $20 through March.Thus,Dody must have spent $100 on entertainment in March.

Accepted Answer

A) True 
 B)False

Question 13

Simple budgeting procedures are often as successful as complex ones.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following relationships is correct?

Accepted Answer

A) Assets + Net worth = Liabilities 
B) Assets + Liabilities = Net Worth 
C) Assets - Net Worth = Liabilities 
D) Assets - Net Worth + Liabilities = zero 
A) Assets + Net worth = Liabilities 
B) Assets + Liabilities = Net Worth 
C) Assets - Net Worth = Liabilities 
D) Assets - Net Worth + Liabilities = zero

Question 15

A noncurrent liability is a debt obligation extending beyond one year.

Accepted Answer

A) True 
 B)False

Question 16

Rent and life insurance expenses are examples of flexible expenses.

Accepted Answer

A) True 
 B)False

Question 17

By definition,a lifestyle asset must depreciate over time.

Accepted Answer

A) True 
 B)False

Question 18

Your personal balance sheet provides

Accepted Answer

A) an estimate of your net worth at a point in time. 
B) an illustration of how your wealth has changed over time. 
C) a summary estimate of your expenses and income over the previous year. 
D) a pro forma budget for the coming year. 
A) an estimate of your net worth at a point in time. 
B) an illustration of how your wealth has changed over time. 
C) a summary estimate of your expenses and income over the previous year. 
D) a pro forma budget for the coming year.

Question 19

Rob's income was $20,000 in 2005 and $22,000 in 2006.If inflation was 6% in 2006,then we can say that Rob's 2006 income

Accepted Answer

A) simply matched the inflation rate. 
B) fell behind the inflation rate. 
C) exceeded the inflation rate by 4%. 
D) lagged the inflation rate by 2%. 
A) simply matched the inflation rate. 
B) fell behind the inflation rate. 
C) exceeded the inflation rate by 4%. 
D) lagged the inflation rate by 2%.

Question 20

A personal income statement shows

Accepted Answer

A) a detailed breakdown of cash income and expenses over a past period of time. 
B) a comparison of income and expenses at a point in time. 
C) your contribution to savings for the year by following strict accounting rules for determining net income. 
D) all revenue,expense,asset,liability,and net worth items. 
A) a detailed breakdown of cash income and expenses over a past period of time. 
B) a comparison of income and expenses at a point in time. 
C) your contribution to savings for the year by following strict accounting rules for determining net income. 
D) all revenue,expense,asset,liability,and net worth items.

Dissavings can

Jan showed the following financial items in 2007 and 2008: In relation to 2007's savings,Jan's savings in 2008

If your take-home pay is $30,000 annually and you have $15,000 in liquid assets and $5,000 in current liabilities,you have about

Two kinds of noncurrent liabilities are

Management by objective begins with setting goals.

In preparing a balance sheet,you should list only those assets that you own outright;that is,free of debt.

A simple yardstick to measure your annual income performance is to compare the annual inflation rate with your

Last year Ann Heuser's the rate of increase in her nominal income was equal to the rate of inflation;therefore,her real income remained unchanged.

Coding income and expense accounts facilitates identifying and summing amounts at month's end.

For purposes of annual budgeting,it is better to

Which of the following statements might be considered poor advice in budgeting?

Dody Sperber budgeted $80 a month for entertainment.The cumulative variance is an unfavorable $20 through March.Thus,Dody must have spent $100 on entertainment in March.

Simple budgeting procedures are often as successful as complex ones.

Which of the following relationships is correct?

A noncurrent liability is a debt obligation extending beyond one year.

Rent and life insurance expenses are examples of flexible expenses.

By definition,a lifestyle asset must depreciate over time.

Your personal balance sheet provides

Rob's income was $20,000 in 2005 and $22,000 in 2006.If inflation was 6% in 2006,then we can say that Rob's 2006 income

A personal income statement shows

Financial Planning: Why Its Important to You

The Time Value of Money: All Dollars Are Not Created Equal

Taxes: the Governments Share of Your Rewards

Liquidity Management: Managing Current Assets and Current Liabilities

Short-Term Credit Management: Consumer Credit

Consumer Durables: the Personal Auto

Housing: the Cost of Shelter

Financial Markets and Instruments: Learning the Investment Environment

Investment Basics: Understanding Risk and Return

Stocks and Bonds: Your Most Common Investments

Mutual Fundsother Pooling Arrangements: Simplifying, Maybe Improving Investment Performance

Property and Liability Insurance: Protecting Your Lifestyle Assets

Health Care and Disability Insurance: Protecting Your Earning Capacity

Life Insurance and Estate Planning: Protecting Your Dependents

Retirement Planning: Planning for Your Long-Term Needs

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Exam 3: Financial Statement and Budgets: Where Are You Now and Where Are You Going

Dissavings can

Jan showed the following financial items in 2007 and 2008: In relation to 2007's savings,Jan's savings in 2008

If your take-home pay is $30,000 annually and you have $15,000 in liquid assets and $5,000 in current liabilities,you have about

Two kinds of noncurrent liabilities are

Management by objective begins with setting goals.

In preparing a balance sheet,you should list only those assets that you own outright;that is,free of debt.

A simple yardstick to measure your annual income performance is to compare the annual inflation rate with your

Last year Ann Heuser's the rate of increase in her nominal income was equal to the rate of inflation;therefore,her real income remained unchanged.

Coding income and expense accounts facilitates identifying and summing amounts at month's end.

For purposes of annual budgeting,it is better to

Which of the following statements might be considered poor advice in budgeting?

Dody Sperber budgeted $80 a month for entertainment.The cumulative variance is an unfavorable $20 through March.Thus,Dody must have spent $100 on entertainment in March.

Simple budgeting procedures are often as successful as complex ones.

Which of the following relationships is correct?

A noncurrent liability is a debt obligation extending beyond one year.

Rent and life insurance expenses are examples of flexible expenses.

By definition,a lifestyle asset must depreciate over time.

Your personal balance sheet provides

Rob's income was $20,000 in 2005 and $22,000 in 2006.If inflation was 6% in 2006,then we can say that Rob's 2006 income

A personal income statement shows

Financial Planning: Why Its Important to You

The Time Value of Money: All Dollars Are Not Created Equal

Taxes: the Governments Share of Your Rewards

Liquidity Management: Managing Current Assets and Current Liabilities

Short-Term Credit Management: Consumer Credit

Consumer Durables: the Personal Auto

Housing: the Cost of Shelter

Financial Markets and Instruments: Learning the Investment Environment

Investment Basics: Understanding Risk and Return

Stocks and Bonds: Your Most Common Investments

Mutual Fundsother Pooling Arrangements: Simplifying, Maybe Improving Investment Performance

Property and Liability Insurance: Protecting Your Lifestyle Assets

Health Care and Disability Insurance: Protecting Your Earning Capacity

Life Insurance and Estate Planning: Protecting Your Dependents

Retirement Planning: Planning for Your Long-Term Needs

Filters