Personal Finance - Chapter 3 Review
A home fire-safe box is a good way to protect an important document from theft.
False
Real estate is an example of a liquid asset.
False
Take-home pay is equal to your salary.
False
The total of your fixed and variable expenses is your cash flow.
False
A deficit is when more money is spent than is earned or received.
True
Insolvency happens when the total of your liabilities is greater than your assets.
True
Your network worth goes up when you __.
pay off previous debts
An example of a liquid asset is a __.
savings account
The first step in planning a budget is __.
setting financial goals
A telephone bill is a liability.
False
You should include bonuses you might get at work when you estimate your income.
False
Safe-deposit box
a small, secure storage compartment that can be rented in a bank
A cash flow statement gives you important feedback on your __.
income and spending patterns
A savings option many employers offer is __.
putting paycheck deductions in employees' retirement funds
An example of a current liability is __.
taxes
Net Worth
the difference between the amount you own and the debt you owe
One use of discretionary funds is spending on __.
videos
An example of a variable expense is __.
electric bills
Surplus
extra money that can be spent or saved
Money Management
the method of planning how to get the most from your money
Discretionary Income
the money left over after essentials are paid for
Market Value
the price at which a property could be sold
A measure of the changes in prices for commercially purchased goods and services is called the Consumer Price Index.
True
The title to your car is an example of a personal financial document.
True
A disadvantage of using a safe-deposit box for keeping financial documents is that it __.
can cost $100 a year to rent
Liquid Assets
cash and items that can be quickly converted to cash
Personal Financial Statements
documents that provide information about your current financial position and present a summary of your income and spending
A good budget has all the following characteristics EXCEPT __.
inaccessibility
Liabilities
the debts you owe
Deficit
a situation that occurs if a person spends more than he or she receives
