chapter 2 quiz

the difference between actual spending and the amount planned is called a

budget variance

which of the following is not one of the suggestions to help make saving easier?

buy long-term bonds once each month using paycheck

money left over after paying for housing, food, and other necessities is called

discretionary income

cash flow is the ____ of cash during a given period of time.

inflow and outflow

which report shows what you own and what you owe? (check all that apply)

personal balance sheet, net worth statement, statement of financial position

which of the following statements regarding emergency funds is true?

adequate emergency fund is 3-6 months of living expenses

which of the following assets are liquid assets? (check all that apply)

cash, savings account, money market account

the inability to pay debts when they are due is called

insolvency

which of the following are normally fixed expenses?

mortgage payments, rent, car loan payments

the length of time to hold on to records varies according to the type of record. how long should birth certificates, wills, and social security records be kept?

permanently

what is it called when cash inflows (receipts) are greater than cash outflows (expenditures)?

surplus

net pay (the amount of your paycheck after taxes and any other deductions come out) is also called

take-home pay

which of the following adequately describes net worth? (check all that apply)

total assets minus total liabilities, what is left after selling all assets and paying off all debts

the "A" in the SMART approach to setting goals stands for

action-oriented

which of the following is not a way to increase net worth?

increase liabilities

what is the first step in creating a budget?

set financial goals

good financial goals will have the following characteristics (check all that apply):

specific dollar amount, measurable, realistic to achieve

flexible payments for expenses that change from month to month are called _____ expenses

variable