Personal Finance Final

Loans should be recorded as a liability on the balance sheet at their:

Current outstanding balance

What is the most preferred way for one to deal with budget deficits?

Cutting one's low priority expenses

Which of the following cards provides direct access to your checking account?

Bank debit cards

You should consider your ___ before you take on a large consumer loan.

Budgeted expense

Commercial banks are insured by the

Federal Deposit Insurance Corporation (FDIC)

Which of the following is true of a budget

It is a detailed financial forecast

Which of the following is true of an individual's net worth?

It is the difference between an individual's total assets and his or her total liabilities

What is an example of personal property?

Jewelry

Which of the following ratios indicates your ability to meet current debt payments with existing assets that can be converted to cash readily?

Liquidity

Which of the following is a preferred use of a credit card?

Occasionally for convenience

Which of the following portions of a mortgage loan is recorded as a liability on the balance sheet?

Outstanding principal portion only

______ value is the value today of an amount to be received in the future.

Present

Which of the following is recommended if you loan money to a friend or relative?

Put the agreement in writing

A(n)_____is not an interest bearing account.

Regular checking account

What is an example of a liquid asset?

Savings account

Which of the following is not a strategy to building your nest egg?

Splurge once in awhile

The primary purpose of a life insurance plan is

To protect the dependents of the insured from financial loss in the event of his/her untimely death

What can you do if your budget shows an annual budget deficit?

You can liquidate investments to meet the total budget shortfall for the year.

Annual budgets help in monitoring and controlling income, living expenses, purchases, and savings on:

a yearly basis.

Employee benefits may include

all the above

A credit scoring system might assign points according to your age and

annual income

Which of the following will lead to a poor credit rating?

applying for a long term loan and occasionally being late with a payment

_____ is a benefit of using credit cards.

being able to meet a financial emergency

A detailed forecast used to monitor and control expenses

budget

It is good to use credit for

buying a car

The most important financial planning for young people concerns

career

A(n)____ is an agency that provides credit information about individual borrowers to lenders.

credit bureau

The best way to achieve your financial objectives is to

develop a sound financial plan

Investment assets are required to

earn a return

A balance sheet describes a person's

financial position at a given point in time.

Your income is directly related to your

geographic location. age. education.

The total amount of salary you earn before taxes are deducted is your

gross pay

An income statement includes:

income, expenses and cash surplus or deficit

The three parts of an individual's balance sheet are his or her

income, liabilities, and assets

A(n)___ loan is a loan that is repaid in a series of fixed, scheduled payments rather than in a lump sum.

installment

Once you define your _______ financial goals, you can prepare a cash budget for the upcoming year.

long-term

The main reason to do personal fi planning is to

maximize overall utility

Money is

medium of exchange

Credit unions are

member owned financial cooperatives

The most important rule for establishing a savings plan is to

pay yourself first

The income and expense statement examines your financial

performance

The last step in the financial planning process is to

redefine goals and revise plans and strategies as personal circumstances change

Borrowing from ___ is seldom recommended by financial advisors.

relatives

Financial goals should be

specific, attainable, prioritized

Financial planning helps us to

spend wisely

The four stages of an economic cycle would not include

stagnation

The least expensive method for banks to interact with their customers is

through the internet

Most creditors ____ if you are having difficulty meeting your payments.

will work out a solution

You have $450 in your checking account when your ATM card and PIN are stolen. You could lose up to ____ if you report the lost ATM card within 2-8 business days.

$500

What is an example of a liquid asset?

Checking account