Question 1

When creating a budget,which of the following statements is true?

Accepted Answer

A)   Include in income the bonuses and gifts you expect to receive.
B)   It is easier to create a budget if your earnings vary.
C)   Common financial problems can be maximized through budgeting.
D)   Numbers in the budget are estimates.
E)   It is better to overestimate your income for next year.F) B) and C)
G) A) and B)

Question 2

When creating a personal balance sheet,which of the following is a current liability?

Accepted Answer

A)   Checking account
B)   Net worth
C)   Student loan
D)   Money your sister owes you in two years
E)   Charge account balanceF) A) and E)
G) B) and E)

Question 3

Given the following information,calculate the debt ratio percentage: Liabilities = $24,500
Liquid assets = $4,900
Monthly credit payments = $800
Monthly savings = $760
Net worth = $72,500
Current liabilities = $1,600
Take-home pay = $2,300
Gross income = $3,500
Monthly expenses = $-2,040

Accepted Answer

A)   33.79
B)   -3.06
C)   2.40
D)   34.78
E)   -21.71F) B) and D)
G) C) and D)

Question 4

All of the following are fixed expenses except a(n)

Accepted Answer

A)   Mortgage payment.
B)   Installment loan payment.
C)   Monthly bus pass.
D)   Allocation for life insurance.
E)   Electric bill.F) A) and C)
G) A) and B)

Question 5

A cash flow statement uses this equation: Assets - Liabilities = Net worth.

Accepted Answer

A) True 
 B)False

Question 6

Programs are available to help low-income older or disabled people who have difficulty budgeting.

Accepted Answer

A) True 
 B)False

Question 7

A cash flow statement uses this equation: Total cash received during the time period - Cash outflows during the time period = Cash surplus (deficit).

Accepted Answer

A) True 
 B)False

Question 8

When creating a budget,it is important to save the amount you have left at the end of the month.

Accepted Answer

A) True 
 B)False

Question 9

The number of personal financial records a household has to organize may seem overwhelming.How long should you keep documents relating to the purchase of real estate?

Accepted Answer

A)   Until the mortgage is paid off
B)   Until you move out of the house
C)   Three years
D)   Seven years
E)   IndefinitelyF) D) and E)
G) A) and E)

Question 10

Given the following information,calculate total assets:

Accepted Answer

$196,100
Feedback: Total asse...

Question 11

Another name for a statement of financial position is a

Accepted Answer

A)   Balance sheet.
B)   Bank statement.
C)   Budget.
D)   Cash flow statement.
E)   Time value of money report.F) None of the above
G) B) and D)

Question 12

A current ratio of 2 means

Accepted Answer

A)   2% from each paycheck is available for savings.
B)   The minimum payment for a credit card is 2% of the balance.
C)   2 months of living expenses are available in case of emergency.
D)   Net worth equals 2 times the amount of debt.
E)   $2 of liquid assets are available for every $1 in current liabilities.F) C) and D)
G) A) and B)

Question 13

When creating a budget,it is important to

Accepted Answer

A)   Save the amount you have left at the end of the month.
B)   Set aside savings after your variable expenses are paid.
C)   Save an amount no more than 3% of your annual income in an emergency fund.
D)   Spend the amount of money you have budgeted in each category.
E)   "Pay yourself first" by setting aside savings before other expenses are budgeted.F) B) and C)
G) A) and E)

Question 14

Financial experts recommend a monthly savings ratio of at least ____ of gross income.

Accepted Answer

A)   0%
B)   5-10%
C)   20%
D)   25-35%
E)   50%F) C) and D)
G) A) and B)

Question 15

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

Accepted Answer

A)   W-2 forms
B)   Personal financial statements
C)   Warranties
D)   Marriage certificates
E)   Checking account statementsF) B) and D)
G) A) and E)

Question 16

Which of the following ratios shows the relationship between gross income and money saved?

Accepted Answer

A)   Debt ratio
B)   Current ratio
C)   Liquidity ratio
D)   Debt payments ratio
E)   Savings ratioF) A) and B)
G) C) and D)

Question 17

Financial experts recommend a debt/payments ratio of less than ____ of take-home pay.

Accepted Answer

A)   0%
B)   5-10%
C)   20%
D)   25-35%
E)   50%F) C) and E)
G) A) and B)

Question 18

Which of the following is NOT a main purpose of a budget?

Accepted Answer

A)   Help to live within your income
B)   Spend your money without care
C)   Reach financial goals
D)   Prepare for financial emergencies
E)   Develop wise financial management habitsF) A) and D)
G) D) and E)

Question 19

The document that would be most useful to track planned spending patterns for the next month is the

Accepted Answer

A)   Balance sheet.
B)   Cash flow statement.
C)   Budget.
D)   All of these.
E)   None of these.F) C) and D)
G) A) and B)

Question 20

What are two methods that can make saving easier?

Accepted Answer

Three methods are identified in Chapter ...

Exam 2: Money Management Skills

Financial experts recommend a debt/payments ratio of less than ____ of take-home pay.

Correct AnswerverifiedShow Answer

When creating a budget,it is important to save the amount you have left at the end of the month.

Correct AnswerverifiedShow Answer

All of the following are fixed expenses except a(n)

Correct AnswerverifiedShow Answer

Which of the following ratios shows the relationship between gross income and money saved?

Correct AnswerverifiedShow Answer

A current ratio of 2 means

Correct AnswerverifiedShow Answer

The document that would be most useful to track planned spending patterns for the next month is the

Correct AnswerverifiedShow Answer

Financial experts recommend a monthly savings ratio of at least ____ of gross income.

Correct AnswerverifiedShow Answer

A cash flow statement uses this equation: Assets - Liabilities = Net worth.

Correct AnswerverifiedShow Answer

Which of the following is NOT a main purpose of a budget?

Correct AnswerverifiedShow Answer

Given the following information,calculate the debt ratio percentage: Liabilities = $24,500 Liquid assets = $4,900 Monthly credit payments = $800 Monthly savings = $760 Net worth = $72,500 Current liabilities = $1,600 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $-2,040

Correct AnswerverifiedShow Answer

What are two methods that can make saving easier?

Correct AnswerverifiedThree methods are identified in Chapter ...View AnswerShow Answer

When creating a personal balance sheet,which of the following is a current liability?

Correct AnswerverifiedShow Answer

A cash flow statement uses this equation: Total cash received during the time period - Cash outflows during the time period = Cash surplus (deficit).

Correct AnswerverifiedShow Answer

Programs are available to help low-income older or disabled people who have difficulty budgeting.

Correct AnswerverifiedShow Answer

The number of personal financial records a household has to organize may seem overwhelming.How long should you keep documents relating to the purchase of real estate?

Correct AnswerverifiedShow Answer

Given the following information,calculate total assets:

Correct Answerverified $196,100Feedback: Total asse...View AnswerShow Answer

When creating a budget,it is important to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Another name for a statement of financial position is a

Correct AnswerverifiedShow Answer

When creating a budget,which of the following statements is true?

Correct AnswerverifiedShow Answer

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Three methods are identified in Chapter ...
View Answer

Correct Answer
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$196,100
Feedback: Total asse...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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