Question 1

The monthly income and expense plan often highlights the need for effective cash management during the budget year.

Accepted Answer

A) True 
 B)False

Question 2

For most individuals,which item below is an example of a lifestyle asset?

Accepted Answer

A) 100 shares of IBM stock 
B) $2,000 in a savings account 
C) $10,000 vested interest in an employer's retirement plan 
D) A new car

Question 3

An asset that influences the quality of your life is referred to in the text as a

Accepted Answer

A) lifestyle asset. 
B) liquid asset. 
C) current asset. 
D) lifelong asset.

Question 4

Auto loan payments are an example of an inflexible expense.

Accepted Answer

A) True 
 B)False

Question 5

The cumulative variable is equal to

Accepted Answer

A) favorable variances less unfavorable variances over the previous months. 
B) favorable variances plus unfavorable variances over the previous months. 
C) this months planned expenses less actual expenses. 
D) this months actual expenses less planned expenses.

Question 6

Our higher order goals are reduced to consumption and savings goals for budgeting purposes.

Accepted Answer

A) True 
 B)False

Question 7

If some expense items are related to your income,and your income increases above budgeted amounts,you can expect

Accepted Answer

A) favorable variances in both income and expense accounts. 
B) budgeted savings to remain about the same. 
C) favorable income variances and unfavorable variances in related expenses. 
D) savings will decrease.

Question 8

Which of the following items would not appear on a personal balance sheet?

Accepted Answer

A) Jewelry 
B) Credit card balances 
C) Rent expense 
D) A loan to a friend

Question 9

A savings account is an example of a liquid asset.

Accepted Answer

A) True 
 B)False

Question 10

Funds borrowed on a life insurance policy are shown on the balance sheet as

Accepted Answer

A) a current liability. 
B) a noncurrent liability. 
C) an offset to the value of the stock. 
D) an offset to net worth.

Question 11

If your assets increase from one year to the next,so must your net worth by an equal amount.

Accepted Answer

A) True 
 B)False

Question 12

Most U.S.families save less than 6% of their disposable incomes.

Accepted Answer

A) True 
 B)False

Question 13

The best description of an asset is

Accepted Answer

A) something you own that has market value. 
B) something you either own or control that provides monetary or psychic income. 
C) anything of personal value to you. 
D) something you own that has market value and is clear of any debt obligation.

Question 14

If a balance sheet is prepared correctly,assets plus liabilities equals net worth plus savings.

Accepted Answer

A) True 
 B)False

Question 15

Liquidity ratios attempt to measure the adequacy of a family's net worth.

Accepted Answer

A) True 
 B)False

Exam 3: Financial Statement and Budgets: Where Are You Now and Where Are You Going

The monthly income and expense plan often highlights the need for effective cash management during the budget year.

For most individuals,which item below is an example of a lifestyle asset?

An asset that influences the quality of your life is referred to in the text as a

Auto loan payments are an example of an inflexible expense.

The cumulative variable is equal to

Our higher order goals are reduced to consumption and savings goals for budgeting purposes.

If some expense items are related to your income,and your income increases above budgeted amounts,you can expect

Which of the following items would not appear on a personal balance sheet?

A savings account is an example of a liquid asset.

Funds borrowed on a life insurance policy are shown on the balance sheet as

If your assets increase from one year to the next,so must your net worth by an equal amount.

Most U.S.families save less than 6% of their disposable incomes.

The best description of an asset is

If a balance sheet is prepared correctly,assets plus liabilities equals net worth plus savings.

Liquidity ratios attempt to measure the adequacy of a family's net worth.