Exam 2: Using Financial Statements and Budgets

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?

Your total cash income is $40,000.You pay $5,000 in taxes and $30,000 in other expenses.Your savings ratio is

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Four categories,accounting for 75% of consumer spending,include [utilities | clothing].

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

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 family could have a positive savings ratio at the same time that its debt service ratio is increasing.

Jewelry,furniture,and computers are examples of personal property.

In order to minimize the difficulty associated with meeting monthly loan payments,the debt service ratio should be

The Hart family spends 30 percent of their disposable income on housing,5 percent on medical expenses,25 percent on food,10 percent on clothing,14 percent on loan repayments,and 8 percent on entertainment.How much of their disposable income is available for savings and investment? (Show all work.)

Which of the following is among the four categories accounting for almost three-quarters of consumer spending?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -You bought a $500 stereo on the installment plan and made two payments of $75 during the year.On your income and expense statement for the year,you will show an expense of [$150 | $500].

Mindy and Lou had total liquid assets of $10,000 and total current debts of $30,000.What is their liquidity ratio?

A charge made on your credit card becomes a liability as soon as the charge is incurred.

The balance sheet equation is assets plus liabilities equals net worth.

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

When estimating income for the income and expense statement,you should

You are solvent if your

A balance sheet is like a photograph of your financial condition,while an income and expense statement is like a motion picture.

The income and expense statement examines your financial

The need for budget adjustments is indicated when