Ch 2 Smartbook / Quiz, PF

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

True or false: Total assets minus only current liabilities equal net worth. Be sure to read the sentence carefully before answering.

False *The balance sheet equation is total assets less total liabilities.

Real estate is not a liquid asset.

True

True or false: Take-home pay is the same as discretionary income.

False *Discretionary income is income left over after necessities have been paid.

Which combination of liabilities would be classified as current on a balance sheet?

Medical bills, income tax payments owed, insurance premiums to be paid next month, and charge accounts

Money management refers to the daily financial activities necessary to manage current ______ economic resources while working toward long-term financial security.

Personal

Debts due within short time, usually the next 12 months, would be classified as _____ liabilities, while debts that will come due in a period beyond the next 12 months would be categorized as _____-term liabilities.

current, long

A personal _______ sheet also called a net worth statement or statement of financial position, reports what you own and what you owe.

balance

financial statement that reports what an individual or a family owns and owes?

balance sheet

Time ________ of money calculations can be used to calculate progress toward achieving different financial goals.

value

When you calculate a budget ___, you determine the difference btwn the actual amount spent or received and the amount budgeted

variance

True or False: An adequate emergency fund is usually 3-6 months of living expenses

true

What are the major money management activities?

-Storing and maintaining personal financial records -Creating and implementing a plan for savings -Preparing personal financial statements

Which of the following provide accurate explanations of net worth?

-The amount you would have if you sold the assets and paid off the liabilities -Assets minus liabilities

Personal balance sheet and the cash flow statement come from financial institutions, businesses, or the government.

False

What can help you to achieve your financial goals?

-Save between 5 percent and 10 percent of each paycheck. -Save coins in a jar at the end of each day for deposit at a future time into a savings account. -Write a check each payday to deposit into a savings account. -Have savings deducted and automatically deposited into a savings account from each paycheck.

If Mary has cash inflow for the year of $120,000 with cash outflows of $135,000, her cash flow statement would show a:

$15,000 deficit must subtract the outflows from the inflows to derive the number. When cash outflows are greater than inflows, a deficit results.

Tommy White has the following financial items on his balance sheet: $10,000 of liquid assets, $15,000 of personal property, $300,000 of real estate, $5,000 of current liabilities, and $120,000 of home mortgages. What is his net worth?

$200,000 *Sum the assets and subtract the total of the liabilities (current liabilities plus the home mortgage).

If expected expenditures for food were $1,000 while the actual food costs were $750, what would be the variance? Multiple choice question.

$250 favorable *With expectations to spend $1,000, it is favorable by $250 if only $750 is spent.

If Joe and Mary Smith have money market accounts of $100,000, real estate holdings of $300,000, loans of $25,000, and investments of $10,000, what would their total assets be?

$410,000 *Money market accounts, real estate holdings, and investments are assets; their value is $100,000+300,000+10,000 =$410,000.

If Tom and Liz Gomes have liquid assets of $200,000, real estate of $350,000, home improvement loans of $250,000, and investments of $30,000, what would their total assets be?

$580,000 *Liquid assets, real estate, and investments are assets; their value is $200,000+350,000+30,000 = $580,000.

If assets are $1,500,000 and liabilities are $850,000, then the net worth is:

$650,000

Joe borrowed $100,000 (a four-year loan at 10 percent interest) on January 2, 2020. During the course of the year, he paid back $30,000 on that debt. What would his December 31, 2020 balance sheet show for this debt? Interest is an expense and not part of the loan balance.

$70,000 because the balance sheet should report what is owed on the balance sheet date.

The two documents considered to be part of personal financial statements include the personal balance sheet and ?

Cash flow statement

How is a cash surplus (or deficit) on a statement of cash flows calculated?

Cash inflows (receipts) minus cash outflows (expenditures) during a given period of time

After categorizing assets and calculating total assets, what do you do next when preparing the balance sheet?

Classify liabilities, total the liabilities, and calculate net worth

Purchase receipts, insurance policies, tax forms, and ____________ are the basis of financial record keeping.

Credit card statements

What assets are liquid assets?

Savings account Money market account Cash Cash value of life insurance

Which of the following statements are true about a balance sheet that you are reviewing on 1/15/2021 that shows an "as of" date of 12/31/2020 and assets of $600,000 and liabilities of $425,000? Multiple choice question.

The net worth is $175,000 as of 12/31/2020. *The assets have a market value of $600,000 as of 12/31/2020, but this does not necessarily reflect their value as of 1/15/2021

The text covers ______ main money management activities.

Three

The balance sheet equation is:

Total Assets - Total Liabilities = Net Worth

Money management involves financial activities necessary to manage current personal economic resources, while working for the achievement of long-term financial security.

True

cash _______ is the actual inflow and outflow of cash during a given time period.

flow

Cash flow is the ______ ______ ________ of cash during a given period of time.

inflow and outflow

Invoices, credit card statements, __________ policies, and tax forms are the basis of financial record keeping and personal economic choices.

insurance

A cash flow statement shows a summary of cash _________ and payments for a given period such as a month or a year.

receipts


Kaugnay na mga set ng pag-aaral

Social Studies Section 30 Study Guide

View Set

Dermatologic Structure & Function - Burns

View Set

Pre-Lecture Quiz: Chapter 14 Before Conception (Look at numbers 66-75)

View Set

Postulate 3-1, Theorems 3-(1,2,3)

View Set

New Testament Final Exam Vocab Guide

View Set

Karch's PrepU (Pharm) Ch. 14: Antineoplastic Agents

View Set