finance practice test answers

A family has a net worth of $165,000 and liabilities of $176,000, what is the amount of their assets?

$341,000

A person with erratic or seasonal income may need an emergency fund of __________ months or more.

6

Liabilities are amounts representing:

Debts owed now

Money management refers to long-term investment decisions.

False

Opportunity costs are only associated with money management decisions involving long-term financial security.

False

A home file should be used for:

Financial records for current needs.

One of the main purposes of a budget is to help you:

Live within your income

One of the main purposes of personal financial statements is to:

Measure your progress toward financial goals.

Discretionary income is:

Money left over after paying for housing, food, and other necessities

In order to determine net worth, you would create what kind of report?

Personal balance sheet

What is considered to be personal financial statements?

Personal balance sheet and cash flow statement

A personal balance sheet:

Reports what an individual or a family owns and owes

Financial goals should take a SMART approach with goals that are:

Specific, Measurable, Action-Oriented, Realistic and Time-Based

Flexible payments that change from month to month are referred to as:

Variable expenses

Your Aunt gives you some money for your birthday and you decide to put it into your savings account instead of spending it. The trade-off of not being able to spend the money now is this decision's ________ cost.

opportunity