PF Review -Q1

A balance sheet shows your financial condition as of the time the statement is prepared. T or F

True

A charge made on your credit card becomes a liability as soon as the charge is incurred. T or F

True

You are solvent if your a. total assets exceed total liabilities. b. total liabilities exceed net worth. c. total liabilities exceed total assets. d. total assets exceed net worth. e. none of these.

a. total assets exceed total liabilities.

The income statement is specific to a. last year. b. a specific period of time. c. one point in time. d. next year. e. none of these

b. a specific period of time.

Mandy and Jeff have a net worth of $25,000 and total assets of $140,000. If their revolving credit and unpaid bills total $2,200, what are their total liabilities? a. $142,200 b. $167,200 c. $165,000 d. $115,000

d. $115,000 net work - total assets

Budgets are a. unnecessary. b. restrictive. c. permanent. d. complicated. e. are forward looking

e. are forward looking

A budget is a a. line of credit. b. financial statement. c. set of personal financial objectives. d. purchase plan. e. detailed financial forecast.

e. detailed financial forecast.

Money I loaned to a friend is a liability on my balance sheet. T or F

False

The balance sheet equation is assets plus liabilities equals net worth. T or F

False

The balance sheet equation is assets plus liabilities equals net worth. T or F

False Liabilities - Equity = Asset