Finance Chapter 3
d. income for retirement
An example of a long-term goal for a young couple may be:
c. Social Security card.
An example of a personal and employment document is a
e. Current liabilities
Ben Chase needs to pay off some of his debts over the next few months. Which item on his balance sheet would help him decide what amounts are due in the near future?
c. surplus.
If a family planned to spend $370 for food during March but only spent $348, this difference would
c. increased savings and investments.
Improvements in a person's financial position are the result of
e. assets.
Items that you own with a monetary worth are referred to as:
a. Money management
Jennifer Rodr uses a computer to help her record her spending each month. She updates her records each week. This would be an example of:
d. His safe deposit box
Jerry Allison needs to store the title to his car and his house. Where is the most likely place that Jerry will store this information?
c. A balance sheet
Karen Price has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes. This would be an example of:
e. different in various geographic areas.
Changes in the cost of living are:
d. when the debt is due.
Current liabilities differ from long-term liabilities based on:
c. $3,200.
During the past month, Jennifer Ernet had income of $3,000 and had a decrease in net worth of $200. This means Jennifer's payments for the month were:
c. Find a place to live with a lower rent
Ed Bostrom wants to reduce his fixed expenses. What action would be appropriate?
d. $44,050
Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3300. She has a car worth $12,500. She has also purchased some stock worth $5500 and she has a retirement account worth $38,550. What is the value of her investment assets?
a. $2,050
Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3300. She has a car worth $12,500. She has also purchased some stock worth $5500 and she has a retirement account worth $38,550. What is the value of her liquid assets?
c. $27,800
Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3300. She has a car worth $12,500. She has also purchased some stock worth $5500 and she has a retirement account worth $38,550. What is the value of her personal assets?
T
T or F: A personal cash flow statement presents income and outflows of cash for a given time period, such as a month.
T
T or F: Current liabilities are amounts that must be paid within a short period of time, usually less than a year.
F
T or F: Definite financial obligations are referred to as variable expenses.
F
T or F: Financial records that may need to be referred to on a regular basis should be kept in a safe-deposit box.
F
T or F: Furniture, jewelry, and an automobile are examples of liquid assets.
T
T or F: If budgeted spending is less than actual spending, this is referred to as a deficit.
F
T or F: If expenses for a month are greater than income, an increase in net worth will result.
T
T or F: Insolvency is a result of having more liabilities than assets.
F
T or F: Medical expenses, clothing, and telephone are examples of fixed expenses.
F
T or F: Money management activities refers to long-term investment decisions.
F
T or F: Most Americans have an adequate savings for emergencies.
F
T or F: Most income tax documents and records should be kept in a safe-deposit box.
F
T or F: Opportunity costs are only associated with money management decisions involving long-term financial security.
T
T or F: Personal records include birth certificate, marriage license, and social security card.
T
T or F: Take-home pay is a person's earnings after deductions for taxes and other items.
T
T or F: When one money management decision is selected, something else must be given up.
F
T or F: a personal balance sheet reports your income and expenses.
c. physical
The Crown family has a difficult time staying on a budget. In an effort to actually see what funds are available for various expenses, a ____________ budget would be most appropriate.
c. balance sheet.
The current financial position of an individual or family is best presented with the use of a(n):
d. budget variance.
The difference between the amount budgeted and the actual amount is called a:
c. fixed expenses.
The payment items that should be budgeted first are:
d. Balance sheet
To determine a person's solvency, which financial document should be consulted?
e. take-home pay.
Total earnings of a person less deductions for taxes and other items is called:
e. consumer
Warranties are commonly associated with ____________ purchases.
a. investment
A broker statement is an example of a(n) ____________ record.
b. actual expenses are greater than planned expenses.
A budget deficit would result when a person's or family's:
b. current income and payments.
A cash flow statement reports a person's or a family's:
b. taxes.
A common deduction from a person's paycheck is for:
b. expenses greater than income for a month.
A decrease in net worth would be the result of:
b. $23,000.
A family with $45,000 in assets and $22,000 of liabilities would have a net worth of:
b. financial records for current needs.
A home file should be used for:
e. transportation.
A major expenditure for most families is:
c. subtracting total liabilities from total assets.
A person's net worth is computed by:
a. reduced amounts owed to others.
A person's net worth would increase as a result of
d. items owned and amounts owed.
A personal balance sheet presents:
c. investment
An individual retirement account is an example of a(n) ____________ asset.
e. Net worth
Kathy Stumbaugh has determined that the value of her assets is $46,000 and that the value of her debts is $32,000. The difference between these two is. $14,000. This calculation would be an example of:
b. An opportunity cost
Kyle Burroughs has decided to put $25 more per week in his savings account. He knows this will reduce his ability to go out to eat each week but thinks building his savings is important. This would be an example of:
b. Day to day finances
Money management refers to:
d. A liquid asset
Nick Rodr has a savings account with $550 in it. He knows that he can withdraw this money from his savings account whenever he wishes: This would be an example of
d. Trade offs associated with financial decisions
Opportunity costs refers to:
a. fixed
Payments that do not vary from month to month are ____________ expenses.
b. His home file cabinet
Sean Carter needs to store monthly statements from his bank, his credit card company and from his savings and loan. Where is the most likely place that Sean will store this information?
T
T or F: "Pay yourself first" is an attitude that can assure building savings for the future.
F
T or F: A budget is a record of how a person or family has spent their money.
T
T or F: A person's lifestyle is a reflection of his or her values, goals, career, and family situation.
T
T or F: A person's net worth is the difference between the value of the items owned and the amounts owed to others.
T
T or F: A personal cash flow statement can serve as the basis for the budget categories used by an individual or family.
c. find saving difficult.
When it comes to savings, most Americans:
b. Balance sheet and cash flow statement
Which of the following are considered to be personal financial statements?
e. checking account statements
Which of the following financial documents would most likely be stored in a safe-deposit box?
e. A telephone bill
Which of the following payments would be considered a variable expense?
d. A cash flow statement
Which of the following presents a summary of income and outflows for a period of time?
d. Assets $40,000; liabilities $45,000
Which of the following situations is a person who could be insolvent?
b. A mortgage
Which of the following would be considered a long-term liability?
