chapter 3 test review- money management
car payment will be recorded in the variable expense section of the monthly cash flow statement
false; fixed expense
a good budget is inaccessible
false; plan practical, accessible, and flexible
when the total of your liabilities are greater than your assets
insolvency
the debts that you owe
liabilities
a measure of the changes in prices for commercially purchased goods and services is called
the consumer price index
a disadvantage of using a safe-deposit box, from the bank, for keeping financial document is that it can cost $100 a year to rent
true
an example of a variable expense is electric bills
true
your net worth goes down when you spend more than you earn
true
your net worth goes up when you pay off previous debts
true
take-home pay is equal to
your salary minus deductions
an excess of expenditure or liabilities over income or assets in a given period
deficit
a savings option many employers offer is sending employees' children through college
false
eating out with friends is considered a fixed expense
false
the first step in planning a budget is estimating income
false
the three asset categories on a balance sheet are Investment, monetary, and long-term assets
false; Monetary, Investment, Tangible
on the personal balance balance sheet an asset can also be
liability
An asset is said to be liquid if it is easy to sell or convert into cash without any loss in its value
liquid assets
the price at which property would sell
market value
planning how to get the most from your money
money management
the difference between the amount that you own and the debts that you owe
net worth
a document that provides information about an individual's current financial position and presents a summary of income and spending
personal financial statements
which of the following is NOT an example of a personal financial document
report card
a small, secure storage compartment that you can rent in a bank, usually for $100 a year or less
safe-deposit box
an amount of something left over when requirements have been met; an excess of production or supply over demand
surplus
when more money is earned or received then spent
surplus
having a budget and using a cash flow statement can help you anticipate
surpluses and deficits
real estate is an example of what kind of asset
tangible asset
a cash flow statement gives you important feedback on your income and spending patterns
true
the total of your fixed and variable expenses is your
cash outflow
your house is valued at $250,000, but you still owe $185,000. Where would you record this on the Balance Sheet?
$250,000 tangible
when estimating our income which of the following should you NOT include
bonuses
