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Exam 3: Money Management Strategy: Financial Statements and Budgeting

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Question 41

Multiple Choice

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Most income tax documents should be kept for _____ year(s) .

A) 0
B) 1
C) 3
D) 5
E) 7

F) B) and D)
G) B) and E)

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Question 42

Multiple Choice

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Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1,200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300. She has a car worth $12,500. She has recently purchased a 2-year certificate of deposit worth $5,500 and she has a retirement account worth $38,550. What is the value of her personal assets?

A) $2,050
B) $98,000
C) $27,800
D) $44,050
E) $171,900

F) A) and B)
G) B) and E)

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Question 43

Multiple Choice

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This month, Ken Grossman has cash inflows of $3,100 and cash outflows of $2,950, resulting in a

What are the main components of a personal balance sheet and a cash flow statement? What is the main purpose of each of these personal financial statements?

The value of items owned minus the amounts owed to others equals:

When one money management decision is made, an alternative must be given up.

Which of the following payments would be considered a variable expense?

Which of the following financial documents would most likely be stored in a safe-deposit box?

Jeff Willis has a budget that he follows each month. He has used Microsoft's Money to help him determine what he wants to spend each month. At the end of the month, Money automatically compares what he budgeted with what he spent. Jeff can also graph these results if he wants to. What type of budget has Jeff created?

Current liabilities differ from long-term liabilities based on:

In order to calculate savings ratio, the amount saved each month is divided by net income.

A personal balance sheet reports your income and expenses.

Which type of financial records includes stock and bond reports?

Opportunity costs are only associated with money management decisions involving long-term financial security.

Kyle Burroughs has decided to put $25 more per week in his savings account. He knows this will reduce his ability to go out to eat each week but thinks building his savings is important. This would be an example of:

Opportunity costs refer to:

A personal cash flow statement can serve as the basis for the budget categories used by an individual or family.

Diane Rossiter lives with her two sons, ages 6 and 9. They have had difficulty managing their finances. What purposes could a budget serve for the Rossiters? What actions would you suggest for the budgeting process to be successful?

Kathy Stumbaugh has determined that the value of her assets is $46,000 and the value of her debts is $32,000. The difference between these two is $14,000. The $14,000 could be referred to as her:

Items that you own with a monetary worth are referred to as: