Question 1

The current financial position of an individual or family is best presented with the use of a

Accepted Answer

A)   budget.
B)   cash flow statement.
C)   balance sheet.
D)   bank statement.E) A) and B)
F) B) and C)

Question 2

Lucky Louie just inherited $50,000 from his great aunt,has $1,500 in his checking account,owns a car with a value of $8,000,and has $20,000 in his 401(k) at work.Louie owes $6,000 on his car,$12,000 on school loans and $3,000 on his credit card.What is Louie's net worth?

Accepted Answer

A)   $58,500
B)   $58,000
C)   $38,500
D)   He has no net worth since he does not own a house.E) A) and B)
F) A) and C)

Question 3

Which of the following is not considered an asset for a family?

Accepted Answer

A)   Cash in a checking account
B)   A mortgaged home
C)   A leased car
D)   FurnitureE) A) and D)
F) C) and D)

Question 4

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 C)

Question 5

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) B) and D)
F) B) and C)

Question 6

Use the following two columns of items to answer the matching questions below:
-net cash flows

Accepted Answer

A)  a summary of assets, liabilities and net worth
B)  the difference between cash inflows and outflows
C)  items owned by a household such as a home or car
D)  a financial statement that measures cash inflows and outflowsE) None of the above
F) C) and D)

Question 7

Long-term liabilities are debts that will be paid at least three years into the future.

Accepted Answer

A) True 
 B)False

Question 8

If your cash outflows are $600 and your cash inflows are $1,000,you can increase your net worth by

Accepted Answer

A)   $1,000.
B)   $600.
C)   $1,600.
D)   $400.E) B) and D)
F) A) and B)

Question 9

Jim has $1,000 income from his job and $200 stock dividend income this month.This month Jim has rent and utilities of $300 and he spent $300 on groceries and $200 on clothing.What is his cash inflow this month?

Accepted Answer

A)   $1,200
B)   $400
C)   $600
D)   $500E) All of the above
F) None of the above

Question 10

In budgeting,it is useful to compare ________ with the budgeted amounts to determine the accuracy or error of the budget and adjust it as necessary.

Accepted Answer

A)   actual inflows
B)   actual outflows
C)   both actual inflows and outflows
D)   current assetsE) A) and B)
F) A) and C)

Question 11

List three components of your personal balance sheet and two components of your income statement.

Accepted Answer

The balance sheet includes ass...

Question 12

Balance sheet assets should be valued at

Accepted Answer

A)   original purchase price.
B)   replacement value.
C)   insured value.
D)   market value.E) A) and C)
F) C) and D)

Question 13

Debts that are to be paid off within a year are called

Accepted Answer

A)   intermediate-term liabilities.
B)   one-year liabilities.
C)   current liabilities.
D)   insignificant debts.E) None of the above
F) A) and B)

Question 14

A document that shows your cash inflows and cash outflows is called a(n)________.

Accepted Answer

personal c...

Question 15

Indicate whether the following are liquid assets or household assets by placing an L or H beside them.
________ Car
________ Home
________ Checking account
________ Furniture
________ Cash
________ Savings account

Accepted Answer

H Car
H Home
L Check...

Question 16

If you do not budget for unexpected expenses in a given month,you will likely experience a(n)

Accepted Answer

A)   cash shortage.
B)   cash surplus.
C)   increase in assets.
D)   decrease in liabilities.E) A) and C)
F) None of the above

Question 17

Which factor does not affect a household's cash inflows?

Accepted Answer

A)   Monthly spending on non-essentials
B)   Stage in career
C)   Type or level of job
D)   Number of family members employedE) A) and B)
F) B) and C)

Question 18

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 retirement accountE) A) and D)
F) A) and C)

Question 19

Which of the following is not a cash outflow?

Accepted Answer

A)   Salary
B)   Rent
C)   Telephone bill
D)   Car paymentE) All of the above
F) A) and C)

Question 20

If Jo Ann has $4,000 in liquid assets and $1,000 in current liabilities,her liquidity ratio is

Accepted Answer

A)   0.25.
B)   4.0.
C)   1,000.
D)   4,000.E) C) and D)
F) B) and C)

Exam 2: Planning With Personal Financial Statements

Indicate whether the following are liquid assets or household assets by placing an L or H beside them. ________ Car ________ Home ________ Checking account ________ Furniture ________ Cash ________ Savings account

Correct AnswerverifiedH CarH HomeL Check...View AnswerShow Answer

Long-term liabilities are debts that will be paid at least three years into the future.

Correct AnswerverifiedShow Answer

A document that shows your cash inflows and cash outflows is called a(n)________.

Correct Answerverifiedpersonal c...View AnswerShow Answer

Which of the following is not considered an asset for a family?

Correct AnswerverifiedShow Answer

If you do not budget for unexpected expenses in a given month,you will likely experience a(n)

Correct AnswerverifiedShow Answer

The current financial position of an individual or family is best presented with the use of a

Correct AnswerverifiedShow Answer

If your cash outflows are $600 and your cash inflows are $1,000,you can increase your net worth by

Correct AnswerverifiedShow Answer

Which of the following is not a cash outflow?

Correct AnswerverifiedShow Answer

If Jo Ann has $4,000 in liquid assets and $1,000 in current liabilities,her liquidity ratio is

Correct AnswerverifiedShow Answer

Lucky Louie just inherited $50,000 from his great aunt,has $1,500 in his checking account,owns a car with a value of $8,000,and has $20,000 in his 401(k) at work.Louie owes $6,000 on his car,$12,000 on school loans and $3,000 on his credit card.What is Louie's net worth?

Correct AnswerverifiedShow Answer

Debts that are to be paid off within a year are called

Correct AnswerverifiedShow Answer

Which factor does not affect a household's cash inflows?

Correct AnswerverifiedShow Answer

List three components of your personal balance sheet and two components of your income statement.

Correct AnswerverifiedThe balance sheet includes ass...View AnswerShow Answer

In budgeting,it is useful to compare ________ with the budgeted amounts to determine the accuracy or error of the budget and adjust it as necessary.

Correct AnswerverifiedShow Answer

A personal balance sheet summarizes

Correct AnswerverifiedShow Answer

Cash flow can be increased by all of the following except

Correct AnswerverifiedShow Answer

Jim has $1,000 income from his job and $200 stock dividend income this month.This month Jim has rent and utilities of $300 and he spent $300 on groceries and $200 on clothing.What is his cash inflow this month?

Correct AnswerverifiedShow Answer

Which of the following would increase your liquid assets?

Correct AnswerverifiedShow Answer

Balance sheet assets should be valued at

Correct AnswerverifiedShow Answer

Use the following two columns of items to answer the matching questions below: -net cash flows

Correct AnswerverifiedShow Answer

Indicate whether the following are liquid assets or household assets by placing an L or H beside them. Car Home Checking account Furniture Cash Savings account

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H Car
H Home
L Check...
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personal c...
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The balance sheet includes ass...
View Answer

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