Exam 2: Using Financial Statements and Budgets

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 total amount of salary you earn before taxes are deducted is called your [gross | net] pay.

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. -Your car has a market value of $10,000 while the balance of the loan against it is now $2,500.Your ownership interest in this car is [$7,500 | $10,000].

What can you do if your budget shows an annual budget deficit?

If your liquid assets equal $50,000 and your current debts equal $15,000; your liquidity ratio is:

Real property refers to immovable property,land and anything fixed to it,which have a relatively long life and high cost.

Financial planning is necessary only if you earn a lot of money.

All of the following are stages in preparing a cash budget except:

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. -Payments made on your loan obligations should [increase | maintain] your net worth.

Monthly statements and pay stubs can be shredded when year-end statements are received.

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. -[Medical expenses | Rent payments] would be more difficult to estimate for the coming year.

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 detailed forecast used to monitor and control expenses is called a [budget | income/expenditures statement].

An income statement deficit would increase net worth.

A cash budget helps you:

On a balance sheet,a mortgage loan is recorded as the:

A cash budget has value only if you use it,review it regularly,and keep careful records of income and expenses.

The balance sheet equation is:

When Phil lists his house on his balance sheet,he should record the:

To determine how effectively the budget is working,you can use:

A cash budget should help you:

Your auto loan payments would be listed as an expense on the income statement.