Personal Finance Ch 2

A budget is a detailed financial forecast.

True

A personal balance sheet sows your financial condition as of the time the statement is prepared.

True

A solvency ratio shows how much "cushion" you have as a protection against insolvency.

True

Jewelry, furniture, and computers, are examples of personal property.

True

Net worth typically peaks between the ages of 65-74 and then diminishes throughout remaining retirement years.

True

Personal financial statements help you identify potential financial problems.

True

The level of the debt service ratio would indicate your ability to meet loan payments out of current income.

True

Total net worth is the numerator for the solvency ratio.

True

Using the future value calculations to estimate the funds needed to meet a goal takes compounding into account.

True

Your net worth and your equity in owned assets are the same basic concept.

True

Interest you earned on your savings would be an entry on your personal balance sheet.

False

Investment assets include items such as boats or automobiles.

False

Mary and Tom purchased their home for 150,000 and it is now worth 175,000. Its asset value is 150,000.

False

Money I loaned to a friend is a liability on my balance sheet.

False