Exam 2: Using Financial Statements and Budgets

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

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?

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

Your investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years.If you require a 7% return,what is the most you should pay for this investment?

A savings ratio expresses the:

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 budget will have value only if it is actually used and [records are kept of actual income/expenses | spending never deviates from the budgeted amount].

Investment assets include items such as boats or automobiles.

The Wilson family's short-term goals might include:

Assets purchased on credit should be included on the asset side of the balance sheet.

_____ would not be listed as a liability on your balance sheet.

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 | maintain] your net worth.

Which of the following are not among the four categories accounting for three-quarters of consumer spending?

Using the information on a personal balance sheet,the _____ ratio indicates your ability to meet current debt payments.

A budget is a detailed statement of what income and expenses occurred over a past period.

The most common budgeting period is a:

A budget is an orderly estimate of income and expenditures.

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 [savings account | retirement account] would be an example of a liquid asset.

Interest you earned on your savings account would be an entry on the balance sheet.

Rosa and Jose have liquid assets of $5,000 and other assets of $50,000.Their total liabilities equal $26,000.What is their net worth?

Money I loaned to a friend is a liability on my balance sheet.