Personal Finance Ch 5 Review

An example of a liquid asset is _____

A savings account

A disadvantage of using a safe-deposit box for keeping financial documents is that it _____

Can cost $100 a year to rent

An example of a variable expense is _____

Electric bills

A surplus is when more money is spent than is earned or recieved

False

Financial transactions and documents cannot be saved on a password protected computer

False

Real estate is an example of a liquid asset

False

The title to your car is not an example of a personal financial document

False

The total of your fixed and variable expenses is your cash flow

False

You should include bonuses you might get at work when you estimate your income

False

A good budget has all the following characteristics except _____

Inacessibility

A cash flow statement gives you important feedback on your _____

Income and spending patterns

Your net worth goes up when you _____

Pay off previous debts

A savings option many employers offer is ____

Putting paycheck deductions in employee's retirement funds

The first step in planning a budget is _____

Setting financial goals

An example of a current liability is _____

Taxes

A telephone bill is a short term liability

True

Creating a personal balance sheet is a good way to determine your assets and liabilities

True

Insolvency happens when the total of your liabilities is greater than your assets

True

Take home pay is equal to your net salary

True

One use of discretionary income is spending on _____

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