chapter 3 test review- money management

car payment will be recorded in the variable expense section of the monthly cash flow statement

false; fixed expense

a good budget is inaccessible

false; plan practical, accessible, and flexible

when the total of your liabilities are greater than your assets

insolvency

the debts that you owe

liabilities

a measure of the changes in prices for commercially purchased goods and services is called

the consumer price index

a disadvantage of using a safe-deposit box, from the bank, for keeping financial document is that it can cost $100 a year to rent

true

an example of a variable expense is electric bills

true

your net worth goes down when you spend more than you earn

true

your net worth goes up when you pay off previous debts

true

take-home pay is equal to

your salary minus deductions

an excess of expenditure or liabilities over income or assets in a given period

deficit

a savings option many employers offer is sending employees' children through college

false

eating out with friends is considered a fixed expense

false

the first step in planning a budget is estimating income

false

the three asset categories on a balance sheet are Investment, monetary, and long-term assets

false; Monetary, Investment, Tangible

on the personal balance balance sheet an asset can also be

liability

An asset is said to be liquid if it is easy to sell or convert into cash without any loss in its value

liquid assets

the price at which property would sell

market value

planning how to get the most from your money

money management

the difference between the amount that you own and the debts that you owe

net worth

a document that provides information about an individual's current financial position and presents a summary of income and spending

personal financial statements

which of the following is NOT an example of a personal financial document

report card

a small, secure storage compartment that you can rent in a bank, usually for $100 a year or less

safe-deposit box

an amount of something left over when requirements have been met; an excess of production or supply over demand

surplus

when more money is earned or received then spent

surplus

having a budget and using a cash flow statement can help you anticipate

surpluses and deficits

real estate is an example of what kind of asset

tangible asset

a cash flow statement gives you important feedback on your income and spending patterns

true

the total of your fixed and variable expenses is your

cash outflow

your house is valued at $250,000, but you still owe $185,000. Where would you record this on the Balance Sheet?

$250,000 tangible

when estimating our income which of the following should you NOT include

bonuses