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

The primary function of the monthly income and expense plan is to assure that each month's income is not less than each month's expenses.

John Davis has a debt ratio of 0.25,which tells us that John

If the rate of increase in the dollar value of your net worth equals the rate of inflation,then your

Current liabilities are defined as past-due debt obligations.

Overdue bills are noncurrent liabilities.

The budget is more directed towards planning than are the income statement and balance sheet.

Kathy charged her groceries on her credit card.The cost of the groceries is now a

To be considered an investment asset,an item

A budget should set optimistic goals even though it may be difficult to achieve them.

The main function of a balance sheet is to show your net worth at a point in time.

A cumulative variance is one carried over from the previous budget year.

Which item is not true with respect to simplifying the recording of income and expenses?

Inflation decreases the purchasing power of money.

Adding together all 12-month cumulative income and expense variances should equal

Your income less your expenses over the previous period represents

A loan associated with a margin account is classified as a current liability.

Financial progress is measured more appropriately by an increase in net worth rather than by an increase in total assets.

If total assets are $80,000 and net worth is $20,000,the debt ratio is 1.33.

A favorable income variance indicates a monthly income

Stacey has a debt service coverage ratio of 1.15.This tells us that