Chapter 3 - Quiz
Patricia McDonald has determined that the value of her liquid assets is $4,500, the value of her real estate is $131,000, the value of her personal possessions is $61,000, and the value of her investment assets is $76,000. she has also determined the value of her current liabilities is $7,100 and the value of her long term liabilities is $88,000. what is Patricia's net worth?
$177,400 explanation: (4,500 + 131,000 + 61,000 + 76,000) - (7,100 + 88,000)
which of the following can be minimized through budgeting? overusing credit lacking a regular savings program failing it ensure future financial security all of these none of these
all of these
a cash flow statement reports a person's or a family's
cash receipts and payments
Andrew Smith has developed a budget that he follows each month. this is a budget he keeps in his head. he does not write anything down, nor does he use a computer to keep track of this budget. what type of budget has Andrew created?
mental budget
discretionary income is
money left over after paying for housing, food, and other necessities
a decrease in net worth could be a result of
outflows exceeding inflows for a month
to determine a person's solvency, which financial document should be consulted?
personal balance sheet
insolvency occurs when liabilities far exceed available assets
true
current liabilities differ from long-term liabilities based on
when the debt is due
a person has $1,550 in liabilities, monthly savings of $200, and monthly gross income of $2,000. what is the person's saving ratio?
.10 explanation: 200 / 2,000