Question 1

____ would be an example of a fixed expense.

Accepted Answer

A) Food 
B) Vacation 
C) Utilities 
D) Taxes 
E) None of these

Question 2

When a cash surplus exists on your income and expense statement,you can use it to

Accepted Answer

A) acquire assets. 
B) pay off existing debts. 
C) increase your savings. 
D) increase your investments. 
E) do any of the above.

Question 3

The main purpose of a budget is to

Accepted Answer

A) develop goals. 
B) develop a financial plan. 
C) give feedback to the plan. 
D) monitor and control financial outcomes. 
E) revise goals.

Question 4

The best way to balance your budget is to increase borrowing.

Accepted Answer

A) True 
 B)False

Question 5

Approximately 50 percent of Americans prepare a detailed household budget.

Accepted Answer

A) True 
 B)False

Question 6

Construct a personal balance sheet from the following information.Be sure the format is correct.(Show all work.)
 $$\begin{array} { l r } 
\text { Cash on hand } & \$ 75 \
\text { Bank credit card balance } & 1,200 \
\text { Utility bill (over due) } & 100 \
\text { Auto loan balance } & 3,500 \
\text { Mortgage } & 75,000 \
\text { Primary residence } & 105,000 \
\text { Jewelry } & 2,000 \
\text { Stocks } & 17,500 \
\text { Coin collection } & 2,500 \
\text { 2001 Toyota } & 7,500
\end{array}$$

Accepted Answer

The answer of Construct a personal balance sheet from the...

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Only four categories of spending account for almost 90% of all consumer expenditures.

Accepted Answer

A) True 
 B)False

Question 9

The time period covered by an income and expense statement is usually

Accepted Answer

A) a week or a month. 
B) a month or a quarter. 
C) a month or a year. 
D) one to two years. 
E) one to five years.

Question 10

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.You will list this car in the assets section of your personal balance sheet at [$7,500 | $10,000].

Accepted Answer

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

Question 11

Personal financial statements help you identify potential financial problems.

Accepted Answer

A) True 
 B)False

Question 12

The value of assets purchased on credit should be included on the asset side of your personal balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

Jamie wants to have $1,000,000 for her retirement in 25 years.How much should she save annually if she thinks she can earn 10% on her investments?

Accepted Answer

The answer of Jamie wants to have $1,000,000 for her...

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.
-Financial planning and budgeting [do | do not] mean the same thing.

Accepted Answer

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

Question 15

Personal net worth is highest at about what age range?

Accepted Answer

A) 35-44 
B) 45-54 
C) 55-64 
D) 65-74 
E) 75 and older

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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 assets exceed your liabilities,you are [saving | solvent].

Accepted Answer

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

Question 18

The personal balance sheet and income and expense statement should be prepared at least annually.

Accepted Answer

A) True 
 B)False

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.
-Net worth is typically highest for those in the age bracket of [ages 65?74 | ages 75 and older].

Accepted Answer

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

Question 20

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.
-Four categories,accounting for 75% of consumer spending,include [clothing | housing].

Accepted Answer

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

Exam 2: Using Financial Statements and Budgets

____ would be an example of a fixed expense.

When a cash surplus exists on your income and expense statement,you can use it to

The main purpose of a budget is to

The best way to balance your budget is to increase borrowing.

Approximately 50 percent of Americans prepare a detailed household budget.

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

Only four categories of spending account for almost 90% of all consumer expenditures.

The time period covered by an income and expense statement is usually

Personal financial statements help you identify potential financial problems.

The value of assets purchased on credit should be included on the asset side of your personal balance sheet.

Jamie wants to have $1,000,000 for her retirement in 25 years.How much should she save annually if she thinks she can earn 10% on her investments?

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. -Financial planning and budgeting [do | do not] mean the same thing.

Personal net worth is highest at about what age range?

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

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 assets exceed your liabilities,you are [saving | solvent].

The personal balance sheet and income and expense statement should be prepared at least annually.

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. -Net worth is typically highest for those in the age bracket of [ages 65?74 | ages 75 and older].

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. -Four categories,accounting for 75% of consumer spending,include [clothing | housing].