Question 1

Student loans,car loans,and housing loans are good examples of

Accepted Answer

A)  long-term liabilities.
B)  current liabilities.
C)  short-term debts.
D)  personal obligations.E) A) and B)
F) All of the above

Question 2

A personal balance sheet summarizes

Accepted Answer

A)  income and expenses.
B)  cash inflows and outflows.
C)  assets,net worth,and income.
D)  assets,liabilities,and net worth.E) None of the above
F) B) and D)

Question 3

Which of the following is not an appropriate approach to solving the problem of an annual budget deficit?

Accepted Answer

A)  Liquidate enough savings or investments to make up the deficit
B)  Increase short-term,flexible expenditure items
C)  Renegotiate terms for long-term expense items
D)  Increase income by getting an additional part-time jobE) None of the above
F) B) and D)

Question 4

Your net worth can change even if your net cash flows are zero.

Accepted Answer

A) True 
 B)False

Question 5

Liabilities can be calculated by

Accepted Answer

A)  adding assets plus net worth.
B)  subtracting net worth from assets.
C)  adding assets plus income.
D)  subtracting expenses from assets.E) A) and B)
F) All of the above

Question 6

Your current liquidity ratio is 2.0.If you take money out of your savings account to pay off a credit card your liquidity ratio will

Accepted Answer

A)  increase.
B)  decrease.
C)  stay the same.
D)  More data is needed to determine what affect this action will have.E) A) and B)
F) A) and C)

Question 7

Which of the following is not a cash inflow?

Accepted Answer

A)  Interest received
B)  Dividend income
C)  Car payment
D)  SalaryE) A) and D)
F) None of the above

Question 8

Cash outflows are also called

Accepted Answer

A)  assets.
B)  expenses.
C)  income.
D)  liabilities.E) A) and C)
F) All of the above

Question 9

A high debt ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

Accepted Answer

A) True 
 B)False

Question 10

Cash flow can be increased by all of the following except

Accepted Answer

A)  increasing credit card purchases.
B)  working overtime.
C)  selling stock.
D)  getting a second job.E) A) and B)
F) A) and D)

Question 11

Cash outflows represent your liabilities such as the pay-off on your car or home.

Accepted Answer

A) True 
 B)False

Question 12

Another term for your wealth calculated by deducting money that you owe from the value of the things you own is

Accepted Answer

A)  gross income.
B)  net income.
C)  net property.
D)  net worth.E) A) and B)
F) A) and C)

Question 13

A person's net worth would increase as a result of

Accepted Answer

A)  reducing amounts owed to others.
B)  reducing earnings.
C)  decreasing the value of assets.
D)  increasing spending on current living expenses.E) A) and B)
F) A) and C)

Question 14

Budgeting is a starting point for developing your financial plan.A good understanding of cash inflows and outflows,or what you make and spend is essential.Describe one way to increase your cash inflows and one way to decrease your personal outflows.

Accepted Answer

Increase inflows through more income suc...

Question 15

Which of the following would increase your liquid assets?

Accepted Answer

A)  Buying a new car
B)  Making regular deposits to a savings account at your bank
C)  Buying rental property
D)  Putting more of your salary in a 401(k) E) A) and C)
F) All of the above

Question 16

The best measure of a person's or family's wealth is

Accepted Answer

A)  the amount of salary earned annually.
B)  net worth.
C)  the total dollar value of investment assets.
D)  the market value of real estate including the personal home.E) A) and B)
F) A) and C)

Question 17

If your monthly disposable income equals $1,500 and you currently save $500/month,your savings rate is ________.

Accepted Answer

The answer of If your monthly disposable income equals $1,500...

Question 18

When a person owns corporate stocks,government or corporate bonds,or mutual funds,these are called

Accepted Answer

A)  liquid assets.
B)  household assets.
C)  investment assets.
D)  retirement assets.E) All of the above
F) None of the above

Question 19

A personal cash flow statement is usually the starting point for an individual's or family's budget.

Accepted Answer

A) True 
 B)False

Question 20

Careful budgeting and controlled spending lead to self-reliance and a feeling of financial freedom.

Accepted Answer

A) True 
 B)False

Exam 2: Planning With Personal Financial Statements

Student loans,car loans,and housing loans are good examples of

Correct AnswerverifiedShow Answer

Liabilities can be calculated by

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When a person owns corporate stocks,government or corporate bonds,or mutual funds,these are called

Correct AnswerverifiedShow Answer

Cash outflows are also called

Correct AnswerverifiedShow Answer

A person's net worth would increase as a result of

Correct AnswerverifiedShow Answer

Which of the following is not an appropriate approach to solving the problem of an annual budget deficit?

Correct AnswerverifiedShow Answer

A personal balance sheet summarizes

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Which of the following is not a cash inflow?

Correct AnswerverifiedShow Answer

A personal cash flow statement is usually the starting point for an individual's or family's budget.

Correct AnswerverifiedShow Answer

Budgeting is a starting point for developing your financial plan.A good understanding of cash inflows and outflows,or what you make and spend is essential.Describe one way to increase your cash inflows and one way to decrease your personal outflows.

Correct AnswerverifiedIncrease inflows through more income suc...View AnswerShow Answer

Your current liquidity ratio is 2.0.If you take money out of your savings account to pay off a credit card your liquidity ratio will

Correct AnswerverifiedShow Answer

Your net worth can change even if your net cash flows are zero.

Correct AnswerverifiedShow Answer

The best measure of a person's or family's wealth is

Correct AnswerverifiedShow Answer

A high debt ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

Correct AnswerverifiedShow Answer

Another term for your wealth calculated by deducting money that you owe from the value of the things you own is

Correct AnswerverifiedShow Answer

Cash flow can be increased by all of the following except

Correct AnswerverifiedShow Answer

Which of the following would increase your liquid assets?

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If your monthly disposable income equals $1,500 and you currently save $500/month,your savings rate is ________.

Correct AnswerverifiedShow Answer

Cash outflows represent your liabilities such as the pay-off on your car or home.

Correct AnswerverifiedShow Answer

Careful budgeting and controlled spending lead to self-reliance and a feeling of financial freedom.

Correct AnswerverifiedShow Answer

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Increase inflows through more income suc...
View Answer

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