Question 1

The savings ratio expresses

Accepted Answer

A) the percentage of gross income saved. 
B) the ability to cover immediate debt when there is an interruption in income. 
C) the relative amount of cash surplus achieved during a given period. 
D) the percentage of tax-deferred income earned annually. 
E) none of the above. 
A) the percentage of gross income saved. 
B) the ability to cover immediate debt when there is an interruption in income. 
C) the relative amount of cash surplus achieved during a given period. 
D) the percentage of tax-deferred income earned annually. 
E) none of the above.

Question 2

Your total cash income is $80,000.You pay $8,000 in taxes and $60,000 in other expenses.Your savings ratio is

Accepted Answer

A) 10.0%. 
B) 14.3%. 
C) 15.0%. 
D) 16.7%. 
E) 17.5%. 
A) 10.0%. 
B) 14.3%. 
C) 15.0%. 
D) 16.7%. 
E) 17.5%.

Question 3

The income and expense statement provides a measure of financial performance over a period of time.

Accepted Answer

A) True 
 B)False

Question 4

Sam and his wife Ann purchased a home in Lubbock,Texas,in 1980 for $100,000.Their original home mortgage was for $90,000.The house has a current market value of $175,000 and a replacement value of $200,000.They still owe $55,000 on their home mortgage.Sam and Sally are now constructing their balance sheet.How should their home be reflected on their current personal balance sheet?

Accepted Answer

A) $200,000 asset and $55,000 liability 
B) $200,000 asset and $90,000 liability 
C) $175,000 asset and $55,000 liability 
D) $175,000 asset and $90,000 liability 
E) $100,000 asset and $55,000 liability 
A) $200,000 asset and $55,000 liability 
B) $200,000 asset and $90,000 liability 
C) $175,000 asset and $55,000 liability 
D) $175,000 asset and $90,000 liability 
E) $100,000 asset and $55,000 liability

Question 5

Phil has $2,000 and he needs it to grow to $4,000 in 8 years.Assuming he adds no more money to this fund,what rate of return would he need to earn?

Accepted Answer

A) 6% 
B) 7% 
C) 8% 
D) 9% 
E) 10% 
A) 6% 
B) 7% 
C) 8% 
D) 9% 
E) 10%

Question 6

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.
-A liability would be listed on a personal balance sheet as the [amount originally borrowed | amount of the next loan payment to be made | none of these].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 7

The personal balance sheet equation is

Accepted Answer

A) Total Assets / Total Liabilities = Net Worth. 
B) Total Assets × Total Liabilities = Net Worth. 
C) Total Assets − Total Liabilities = Net Worth. 
D) Total Assets + Total Liabilities = Net Worth. 
E) Total Liabilities − Total Assets = Net Worth. 
A) Total Assets / Total Liabilities = Net Worth. 
B) Total Assets × Total Liabilities = Net Worth. 
C) Total Assets − Total Liabilities = Net Worth. 
D) Total Assets + Total Liabilities = Net Worth. 
E) Total Liabilities − Total Assets = Net Worth.

Question 8

On an income and expense statement covering January 1 to June 30,____ would not be included as income.

Accepted Answer

A) wages and salaries received in that six months 
B) interest received on June 30 
C) auto sold with payment received May 15 
D) inheritance granted in April, to be paid in September 
E) income tax refund received April 14 
A) wages and salaries received in that six months 
B) interest received on June 30 
C) auto sold with payment received May 15 
D) inheritance granted in April, to be paid in September 
E) income tax refund received April 14

Question 9

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?

Accepted Answer

The answer of The Flemings will need $80,000 annually for...

Question 10

Investment assets include items such as boats or automobiles.

Accepted Answer

A) True 
 B)False

Question 11

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.
-Investment assets are required to [earn a return | provide a service].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

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.
-The most difficult approach to handling a budget deficit is to [increase income | liquidate investments].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 13

A solvency ratio shows how much "cushion" you have as a protection against insolvency.

Accepted Answer

A) True 
 B)False

Question 14

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.
-If you liquidate assets or borrow to make your budget balance,this will [increase | decrease] your net worth.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 15

In a budget,"fun money" is a budget category used for family members to spend as they like without having to account for how it is spent.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) an $800 refrigerator bought on credit June 2 for which payment is not due until July 
B) a paid March telephone bill 
C) health insurance premiums deducted from monthly pay checks 
D) checking account service charges 
E) groceries bought and paid for in June 
A) an $800 refrigerator bought on credit June 2 for which payment is not due until July 
B) a paid March telephone bill 
C) health insurance premiums deducted from monthly pay checks 
D) checking account service charges 
E) groceries bought and paid for in June

Question 17

Total liquid assets is the numerator in the savings ratio formula.

Accepted Answer

A) True 
 B)False

Question 18

A budget is a

Accepted Answer

A) purchase plan. 
B) line of credit. 
C) financial statement. 
D) detailed financial forecast. 
E) set of personal financial objectives. 
A) purchase plan. 
B) line of credit. 
C) financial statement. 
D) detailed financial forecast. 
E) set of personal financial objectives.

Question 19

Michael and Sandy purchased a home for $100,000 five years ago.If it appreciated 6% annually,what is it worth today?

Accepted Answer

A) $100,000 
B) $106,000 
C) $130,000 
D) $133,823 
E) $135,603 
A) $100,000 
B) $106,000 
C) $130,000 
D) $133,823 
E) $135,603

Question 20

A budget is a detailed financial forecast.

Accepted Answer

A) True 
 B)False

The savings ratio expresses

Your total cash income is $80,000.You pay $8,000 in taxes and $60,000 in other expenses.Your savings ratio is

The income and expense statement provides a measure of financial performance over a period of time.

Phil has $2,000 and he needs it to grow to $4,000 in 8 years.Assuming he adds no more money to this fund,what rate of return would he need to earn?

The personal balance sheet equation is

On an income and expense statement covering January 1 to June 30,____ would not be included as income.

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?

Investment assets include items such as boats or automobiles.

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. -Investment assets are required to [earn a return | provide a service].

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. -The most difficult approach to handling a budget deficit is to [increase income | liquidate investments].

A solvency ratio shows how much "cushion" you have as a protection against insolvency.

In a budget,"fun money" is a budget category used for family members to spend as they like without having to account for how it is spent.

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

Total liquid assets is the numerator in the savings ratio formula.

A budget is a

Michael and Sandy purchased a home for $100,000 five years ago.If it appreciated 6% annually,what is it worth today?

A budget is a detailed financial forecast.

Understanding the Financial Planning Process

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 2: Using Financial Statements and Budgets

The savings ratio expresses

Your total cash income is $80,000.You pay $8,000 in taxes and $60,000 in other expenses.Your savings ratio is

The income and expense statement provides a measure of financial performance over a period of time.

Phil has $2,000 and he needs it to grow to $4,000 in 8 years.Assuming he adds no more money to this fund,what rate of return would he need to earn?

The personal balance sheet equation is

On an income and expense statement covering January 1 to June 30,____ would not be included as income.

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?

Investment assets include items such as boats or automobiles.

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. -Investment assets are required to [earn a return | provide a service].

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. -The most difficult approach to handling a budget deficit is to [increase income | liquidate investments].

A solvency ratio shows how much "cushion" you have as a protection against insolvency.

In a budget,"fun money" is a budget category used for family members to spend as they like without having to account for how it is spent.

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

Total liquid assets is the numerator in the savings ratio formula.

A budget is a

Michael and Sandy purchased a home for $100,000 five years ago.If it appreciated 6% annually,what is it worth today?

A budget is a detailed financial forecast.

Understanding the Financial Planning Process

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters