Question 1

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

Accepted Answer

A)  use gross income. 
B)  include expected pay increases. 
C)  adjust for inflation. 
D)  use net income less capitalized interest. 
E)  none of the above. 
A)  use gross income. 
B)  include expected pay increases. 
C)  adjust for inflation. 
D)  use net income less capitalized interest. 
E)  none of the above.

Question 2

_____ is an example of a personal asset.

Accepted Answer

A)  Jewelry 
B)  Mutual fund 
C)  Corporate bond 
D)  Charge account balance 
E)  Premium on auto insurance 
A)  Jewelry 
B)  Mutual fund 
C)  Corporate bond 
D)  Charge account balance 
E)  Premium on auto insurance

Question 3

Kathy purchased new furniture for $10,000.She put $1,000 down and financed $9,000.She will pay $350 per month until the loan is paid off.Which of the following is true of the value of furniture Kathy would record on her personal balance sheet?

Accepted Answer

A)  The furniture should be recorded as an asset of $10,000 on Kathy's balance sheet. 
B)  The $9,000 is entered as a liability on Kathy's balance sheet. 
C)  The furniture should be recorded as a $1,000 expenditure on Kathy's balance sheet. 
D)  The $350 payments are expenditures on Kathy's income and expenditure statement. 
E)  All are correct except c 
A)  The furniture should be recorded as an asset of $10,000 on Kathy's balance sheet. 
B)  The $9,000 is entered as a liability on Kathy's balance sheet. 
C)  The furniture should be recorded as a $1,000 expenditure on Kathy's balance sheet. 
D)  The $350 payments are expenditures on Kathy's income and expenditure statement. 
E)  All are correct except c

Question 4

Mike and Teresa Garza have a monthly gross income of $5,000,but they pay $1,000 per month in taxes.They also pay $2,000 per month in various loan payments.What is their debt service ratio?

Accepted Answer

A)  20% 
B)  30% 
C)  40% 
D)  50% 
E)  60% 
A)  20% 
B)  30% 
C)  40% 
D)  50% 
E)  60%

Question 5

Your _____ is an example of a liquid asset.

Accepted Answer

A)  home 
B)  car 
C)  checking account 
D)  charge account 
E)  life insurance cash value 
A)  home 
B)  car 
C)  checking account 
D)  charge account 
E)  life insurance cash value

Question 6

A balance sheet shows your financial condition as of the time the statement is prepared.

Accepted Answer

A) True 
 B)False

Question 7

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.
-Putting specific target dates on your goals [will not | will] increase the likelihood of their being accomplished.

Accepted Answer

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

Question 8

A cash surplus will typically produce a positive savings ratio.

Accepted Answer

A) True 
 B)False

Question 9

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(n) [auto loan | credit card balance] would be an example of a current liability.

Accepted Answer

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

Question 10

Assets listed on your balance sheet must have monetary value.

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.
-The process of finding the present value is termed as [discounting | compounding].

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.
-If your budget shows a deficit,[increase income | increase expenses] to regain balance.

Accepted Answer

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

Question 13

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 balance sheet provides a statement of your financial [position | performance].

Accepted Answer

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

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.
-Once you define your [short-term | long-term] financial goals,you can prepare a cash budget for the upcoming year.

Accepted Answer

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

Question 15

A house and land are examples of real property.

Accepted Answer

A) True 
 B)False

Question 16

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.
-When your liabilities exceed your assets,you are [solvent | insolvent].

Accepted Answer

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

Question 17

You are solvent if your:

Accepted Answer

A)  total liabilities exceed total assets. 
B)  total assets exceed total liabilities. 
C)  total assets exceed net worth. 
D)  total liabilities exceed net worth. 
E)  none of these. 
A)  total liabilities exceed total assets. 
B)  total assets exceed total liabilities. 
C)  total assets exceed net worth. 
D)  total liabilities exceed net worth. 
E)  none of these.

Question 18

Inflation is expected to be 4 percent in the coming year.If Mr.Gonza earned $37,000 this year,how much must he earn the following year just to keep up with inflation and maintain the balance between his income and his increasing expenditures?

Accepted Answer

To keep up with an inflation of 4% in th

Question 19

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.
-Another term sometimes used for net worth is [collateral | equity].

Accepted Answer

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

Question 20

All assets are recorded on the balance sheet at their original cost.

Accepted Answer

A) True 
 B)False

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

_____ is an example of a personal asset.

Kathy purchased new furniture for $10,000.She put $1,000 down and financed $9,000.She will pay $350 per month until the loan is paid off.Which of the following is true of the value of furniture Kathy would record on her personal balance sheet?

Mike and Teresa Garza have a monthly gross income of $5,000,but they pay $1,000 per month in taxes.They also pay $2,000 per month in various loan payments.What is their debt service ratio?

Your _____ is an example of a liquid asset.

A balance sheet shows your financial condition as of the time the statement is prepared.

A cash surplus will typically produce a positive savings ratio.

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(n) [auto loan | credit card balance] would be an example of a current liability.

Assets listed on your balance sheet must have monetary value.

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 process of finding the present value is termed as [discounting | compounding].

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 your budget shows a deficit,[increase income | increase expenses] to regain balance.

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 balance sheet provides a statement of your financial [position | performance].

A house and land are examples of real property.

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. -When your liabilities exceed your assets,you are [solvent | insolvent].

You are solvent if your:

Inflation is expected to be 4 percent in the coming year.If Mr.Gonza earned $37,000 this year,how much must he earn the following year just to keep up with inflation and maintain the balance between his income and his increasing 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. -Another term sometimes used for net worth is [collateral | equity].

All assets are recorded on the balance sheet at their original cost.

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

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

_____ is an example of a personal asset.

Kathy purchased new furniture for $10,000.She put $1,000 down and financed $9,000.She will pay $350 per month until the loan is paid off.Which of the following is true of the value of furniture Kathy would record on her personal balance sheet?

Mike and Teresa Garza have a monthly gross income of $5,000,but they pay $1,000 per month in taxes.They also pay $2,000 per month in various loan payments.What is their debt service ratio?

Your _____ is an example of a liquid asset.

A balance sheet shows your financial condition as of the time the statement is prepared.

A cash surplus will typically produce a positive savings ratio.

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(n) [auto loan | credit card balance] would be an example of a current liability.

Assets listed on your balance sheet must have monetary value.

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 process of finding the present value is termed as [discounting | compounding].

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 your budget shows a deficit,[increase income | increase expenses] to regain balance.

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 balance sheet provides a statement of your financial [position | performance].

A house and land are examples of real property.

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. -When your liabilities exceed your assets,you are [solvent | insolvent].

You are solvent if your:

Inflation is expected to be 4 percent in the coming year.If Mr.Gonza earned $37,000 this year,how much must he earn the following year just to keep up with inflation and maintain the balance between his income and his increasing 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. -Another term sometimes used for net worth is [collateral | equity].

All assets are recorded on the balance sheet at their original cost.

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