PBFM: Personal and Business Budgeting Review

How many categories are there of the family life cycle?

8

Budgeting finances require calculating... And...? Income, expenses Utility, opportunity cost Investments, savings Inflation, taxes

A

Common stock differs from preferred stock in which of the following? Voting rights Callable features Exchange rates Liquidity

A

Savings account are like money market accounts because of which of the following? They have a limited number of withdrawals They have a high minimum balance required They have low rate return Check writing is authorized

A

Which of the following is not an example of an asset? Children, cash, equipment, or buildings

A

Which of the following is not an example of liability? Cash, equipment loans, charge accounts, or rental fees

A

Budgeting

Allocation of monetary funds based on a determined structure

Individual Retirement Accounts (IRA)

Allow individuals to open an account and begin saving funds toward retirement with tax benefits; can be traditional or roth

Checking Accounts

Allow the user to withdraw and deposite money at any time, used for daily expenses; usually free

Net Income

Amount of income after cost of all goods and taxes are deducted

Gross Income

Amount of income received before cost of goods and taxes

Stocks

An investment in publicly traded companies; provide ownership in a company; can be common or preferred

Net Worth

Assets - liabilities =

budgets

Assists in planning financial situations throughout the year; act as control mechanism in regards to the way money is spent; assist in organizing finances to reduce debt or increase savings

A budget helps prevent that by which of the following? A. Listing expenses B. Identifying shortages before they happen C. Showing current debts D. Creating new income

B

Budget decision reorganizing finances to reduce... Or increase... Problems, happiness Debt, savings Funds, expenses Consistency, originality

B

CDs are common way to save money offered by financial institution. This instance, CD stands for which of the following? Compact disc Certificate of deposit Certificate of development Canadian dollar

B

Hey... Account has a higher rate of return, but it... Account has a low required minimum balance. Savings, money market Money market, savings

B

The two basic parts of a budget are... And... Wants, needs Income expenses Equity debt Resources, consumption

B

Which of the following accurately describes stocks? Employee sponsor retirement benefits plans Investments providing ownership of public companies Savings accounts which include tax benefits Contributions of government required of people

B

Budgets

Blueprints for the execution and organization of revenues and expenditures; a specific plan for spending and saving money

After creating a budget, John realizes expenses exceed his income. To resolve this issue you can do which of the following? A. Invest more in stock market B. Go on a shopping spree C. Eat out less frequently D. Work fewer hours

C

Mutual funds can be described by which of the following statements? Come in two types, common and preferred, provide ownership and Company, Are professionally managed, or provide a cushion or financial condition an emergency.

C

Which of the following is not a step involved in creating a budget? Gather Financial records Track spending Expand earning Avenues Balance the budget

C

Which of the following is not true of Roth IRA? Can be withdrawn at any time Does not require taxes paid on interest Apply the 10% tax penalty on any withdrawals made before the age of 59.5 Does not reduce tax liability

C

Taxes

Contribution for the support of a government required of persons, groups, or businesses within the domain of that government

... Explains how a person changes financial position in, earnings, consumption and savings throughout the life cycle. Financial evolution Portfolio growth Money life cycle Family life cycle

D

Because of the family life cycle changes, goals require which of the following? Long-term Target dates, lots of thoughts, priorities, or constant updating?

D

Budgeting is the... Based on a the determine structure. Process of accomplishing goals Decision to make judgments Development of regulations Allocation on monetary fund's

D

CDs are similar to saving accounts because which of the following? They have high interest rates, They have a fixed rate, they have a fixed term, or They accrue interest?

D

If your income exceeds your expenses, which of the following is recommended? Increase income source Decrease income sources Go on vacation Research investment and savings options

D

Unlike Roth IRA, traditional IRA is have which of the following characteristics? Restrict the amount of cash you can contribute, have tax benefits, allow individuals to save for retirement, or Require taxes be paid on interest?

D

Saving Accounts

Earn interest over time, but have limited number of transfers and withdraws allowed

401 (K) plans

Employee-sponsored benefit plans which provide individuals with the chance to put a portion of their earnings in a financial portfolio; contributions are exempt from income tax and can be rolled over into an IRA or future employers 401k plan

Family Life Cycle

Explains how a person changes financial position, earnings, consumption and savings throughout the life cycle

Rent is an example of fixed or variable expense?

Fixed

Assets

Items of ownership convertible to cash

Variable Expenses

May change or fluctuate; sometimes can be hard to predict

Liabilities

Money owed; debt

The presentation recommends updating modifying your budget how often?

Monthly or weekly

Priorities

Precedence, especially established by order of importance or urgency

Fixed Expenses

Remain the same regardless of business activity

Certificates of Deposit (CDs)

Similar to savings accounts but have higher interest rates, fixed terms and fixed interest rate

False

T/F: Anyone can open a 401K plan

True

T/F: Assets - liabilities = Net worth

True

T/F: Budgeting provides a guide for efficient business decisions

False

T/F: Gross income is income after the cost of goods and taxes are deducted

False

T/F: Short term goals cover a time period of one to two years

The family life cycle helps marketers to find which of the following? Target market, Someone's age, budget expenses, or Family size?

Target market

Goals

The focal points of developing a personal financial plan; need to have set priorities and a target date for achievement; require constant updating as a result of the changing family cycle