CH 2

Money management refers to

Day-to-day financial activities

The main purposes of personal financial statements are to

-Measure your progress toward financial goals. -Maintain information about your financial activities. -Report your current financial position. -Provide data for preparing tax forms or applying for credit.

Financial experts recommend a monthly savings ratio of at least ____ of gross income.

5-10%

How long should you keep documents relating to investments?

As long as you own them

Items with monetary value are referred to as

Assets

The equation to calculate net worth is

Assets - Liabilities = Net Worth

The current financial position of an individual or family is best presented with the use of a

Balance sheet

T/F: Money management refers to annual financial activities necessary to manage personal economic resources.

False - Money management refers to day-to-day financial activities

The inability to pay debts when they are due is called

Insolvency

A personal balance sheet presents

Items owned and amounts owed

The amount you would have if everything of value would be sold and all debts would be paid in full is called your

Net worth

How long should you keep your most current will?

Permanently

The statement that includes liquid assets, real estate, personal possessions, and investment assets is known as a

Personal balance sheet

Which of the following is a deduction to determine take-home pay?

Social Security taxes

Which of the following is NOT a component of money management?

Storing personal financial records, creating personal financial statements, and creating a budget are all components of money management.

T/F: Money management refers to day-to-day financial activities necessary to manage personal economic resources while working toward long-term financial security.

True

When creating a personal balance sheet, which of the following is a real estate asset?

Vacation property