Chapter 2 Reading

Which of the following provide an accurate explanation of net worth?

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

Place the following steps of budgeting in the correct order starting with step 1 to step 5.

1. Set financial goals. 2. Estimate expected income. 3.Allocate an emergency fund and savings. 4. Budget known expenses. 5. Budget estimated expenses. 6. Record spending amounts and evaluate revisions.

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

balance

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

inflow and outflow

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

True.`

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

false

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

insurance