Business Chapter 3

Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3300. She has a car worth $12,500. She has also purchased some stock worth $5500 and she has a retirement account worth $38,550. What is the value of her liquid assets?

$2,050

A family with $45,000 in assets and $22,000 of liabilities would have a net worth of __________

$23,000

Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3300. She has a car worth $12,500. She has also purchased some stock worth $5500 and she has a retirement account worth $38,550. What is the value of her personal assets?

$27,800

Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3300. She has a car worth $12,500. She has also purchased some stock worth $5500 and she has a retirement account worth $38,550. What is the value of her investment assets?

$44,050

Which of the following presents a summary of income and outflows for a period of time?

A cash flow statement

Nick Rodr has a savings account with $550 in it. He knows that he can withdraw this money from his savings account whenever he wishes. This would be an example of _____________

A liquid cost

Which of the following would be considered a long-term liability?

A mortgage

A budget deficit would result when a person's or family's ______________

Actual expenses are greater than planned expenses

Kyle Burroughs has decided to put $25 more per week in his savings account. He knows this will reduce his ability to go out to eat each week but thinks building his savings is important. This would be an example of __________

An opportunity cost

Items that you own with a monetary worth are referred to as ________

Assets

Which if the following situations is a person who could be insolvent?

Assets $40,000; liabilities $45,000

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

Balance sheet

To determine a person's solvency, which financial financial document should be consulted?

Balance sheet

Which of the following are considered to be personal financial statements?

Balance sheets and cash flow statement

The difference between the amount budgeted and the actual amount is called a ____________

Budget variance

Warranties are common,h associated with ___________ purchases

Consumer

Money management refers to ___________

Day-to-day financial activities

Changes in the cost of living are __________

Different in various geographic areas

A decrease in net worth would be the result of ________

Expenses greater than income for a month

Definite financial obligations are referred to as variable expenses (T/F)

False

Financial records that may need to be referred to on a regular basis should be kept in a safe-deposit box (T/F)

False

Money management activities refers to long-term investment decisions (T/F)

False

Opportunity costs are only associated with money management d visions involving long-term financial security (T/F)

False

A home file should be used ________

Financial records for current needs

Ed Bostrom wants to reduce his fixed expenses. What actions would be appropriate?

Find a place to live with a lower rent

When it comes to savings, most Americans _____________

Find saving difficult

Payments that do not vary from month to month are __________ expenses

Fixed

The payment items that should be budgeted first are ___________

Fixed expenses

Sean Carter needs to store monthly statements from his bank, his credit card company and from his savings and loan. Where is the most likely place that Sean will store this information?

His home file cabinet

Jerry Allison needs o store the title to his car and house. Where is the most likely place that Jerry will store this information?

His safe deposit box

An example of a long-term goal for a young couple may be ____________

Income for retirement

Improvements in a person's financial position are the result of ________

Increased savings and investments

A broker statement is an example of a(n) ____________ record

Investment

A personal balance sheet presents __________

Items owned and amounts owed

Jennifer Rodr uses a computer to help her record her spending each month. She updates her records each week. This would be an example of ___________

Money management

Kathy Stumbourg has determined that the value of her assets is $46,000 and that the value of her debts is $32,000. The difference between these two is $14,000.this calculation would be an example of _____________

Net worth

The Crown family has a difficult time staying on a budget. In an effort to actually see what funds are available for various expenses, a ______________ budget would be most appropriate

Physical

A person's net worth would increase as a result of _________

Reduced amounts owed to others

An example of a personal and employment document is a ___________

Social Security card

If a family planned to spend $370 on food during March but only spent $348, this difference would be referred to as a _____________

Surplus

Total earnings of a person less deductions for taxes and other items is called __________

Take-home pay

Opportunity costs refers to __________

Trade-offs associated with financial decisions

A major expenditure for most families is ___________

Transportation

A person's lifestyle is a reflection of his or her values, goals, career, and family situation (T/F)

True

A person's net worth is the difference between the value of the items owned and the amounts owed to others (T/F)

True

A personal cash flow statement presents income and outflows of cash for a given time period, such as a month (T/F)

True

Current liabilities are amounts that must be paid within a short period of time, usually less than a year (T/F)

True

Insolvency is the result of having more liabilities than assets (T/F)

True

Personal records include birth certificate, marriage license, and social security card (T/F)

True

Current liabilities differ from long-term liabilities based on _________

When the debt is due