Question 1

The balance sheet serves as an assessment of assets and liabilities at fair market value as of a specified date.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following would be included in the category of assets known as monetary assets?

Accepted Answer

A)  Money market accounts
B)  Stocks
C)  Bonds
D)  Real estate A

Question 3

The surplus section on an individual's cash-flow statement is similar to net profit for a business.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following is classified as a tangible asset?

Accepted Answer

A)  Motorcycle
B)  Cash
C)  Real estate investment
D)  401(k)  retirement plan

Question 5

When setting up your budget for the month,it is useful to use prior months' cash-flow statements to set your estimates for income and spending for the upcoming month.

Accepted Answer

A) True 
 B)False

Question 6

A debt-to-income ratio of 0.36 or less indicates that disposable income is adequate to make debt repayments.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following types of assets is primarily used for emergencies,maintenance of living expenses,savings,and payment of bills?

Accepted Answer

A)  Monetary
B)  Tangible
C)  Investment
D)  Capital

Question 8

Short-term liabilities are obligations to be paid off within one year.

Accepted Answer

A) True 
 B)False

Question 9

Rita and Jose Hernandez want to assess their financial progress over the next few years.They have decided to take a reading of their status every New Year's Day.Which financial statement would they prepare each year?

Accepted Answer

A)  Will
B)  Cash-flow statement
C)  Balance sheet
D)  Federal income tax return

Question 10

Once budget estimates are determined; one should not make any changes in the budget for at least one year.

Accepted Answer

A) True 
 B)False

Question 11

You should not be fully transparent or talk about all financial matters with your partner.

Accepted Answer

A) True 
 B)False

Question 12

Paul is a college student who has the following financial information.He would like your help in figuring his surplus for last year.

What is Paul's surplus?

Accepted Answer

A)  $2,650
B)  $2,200
C)  $1,250
D)  $1,000

Question 13

Which of the following goals is most clearly stated?

Accepted Answer

A)  Save enough for a down payment on a house in five years
B)  Save $1,000 in one year for a vacation to San Diego
C)  Pay off all credit card balances
D)  Pay cash for a car

Question 14

Values have little impact on financial goals.

Accepted Answer

A) True 
 B)False

Question 15

A long-term goal is one that is projected to be achieved beyond how much time?

Accepted Answer

A)  six months
B)  one year
C)  five year
D)  ten years

Question 16

The debt-to-income ratio provides a view of total debt burden of an individual or family by comparing the dollars spent on gross annual debt repayments with gross annual income.

Accepted Answer

A) True 
 B)False

Question 17

Specific financial goals drive the creation of budgets.

Accepted Answer

A) True 
 B)False

Question 18

Matthew is concerned about his ability to save money regularly and has prepared a budget.Which of the following budget classifications would be most appropriate for Matthew's budget?

Accepted Answer

A)  Savings withheld from income and deposited directly to savings
B)  Savings as a fixed expenditure
C)  Savings as a variable expenditure
D)  Saving whatever may be left over

Question 19

The liability section of a balance sheet would include money owed to a doctor or a lawyer but would not include money owed to a friend.

Accepted Answer

A) True 
 B)False

Question 20

The two most useful financial statements are ____ and ____.

Accepted Answer

A)  federal tax returns; income and expense statements
B)  cash-flow statements; balance sheets
C)  balance sheets; wills
D)  wills; federal tax returns

Exam 3: Financial Statements,tools,and Budgets

The balance sheet serves as an assessment of assets and liabilities at fair market value as of a specified date.

Which of the following would be included in the category of assets known as monetary assets?

The surplus section on an individual's cash-flow statement is similar to net profit for a business.

Which of the following is classified as a tangible asset?

When setting up your budget for the month,it is useful to use prior months' cash-flow statements to set your estimates for income and spending for the upcoming month.

A debt-to-income ratio of 0.36 or less indicates that disposable income is adequate to make debt repayments.

Which of the following types of assets is primarily used for emergencies,maintenance of living expenses,savings,and payment of bills?

Short-term liabilities are obligations to be paid off within one year.

Rita and Jose Hernandez want to assess their financial progress over the next few years.They have decided to take a reading of their status every New Year's Day.Which financial statement would they prepare each year?

Once budget estimates are determined; one should not make any changes in the budget for at least one year.

You should not be fully transparent or talk about all financial matters with your partner.

Paul is a college student who has the following financial information.He would like your help in figuring his surplus for last year. What is Paul's surplus?

Which of the following goals is most clearly stated?

Values have little impact on financial goals.

A long-term goal is one that is projected to be achieved beyond how much time?

The debt-to-income ratio provides a view of total debt burden of an individual or family by comparing the dollars spent on gross annual debt repayments with gross annual income.

Specific financial goals drive the creation of budgets.

Matthew is concerned about his ability to save money regularly and has prepared a budget.Which of the following budget classifications would be most appropriate for Matthew's budget?

The liability section of a balance sheet would include money owed to a doctor or a lawyer but would not include money owed to a friend.

The two most useful financial statements are and .