Finance
A current ratio of 2 means:
$2 in liquid assets are available for every $1 of current liabilities.
If Jack was in a 25% tax bracket and received a $1,100 tax deduction, by how much would his taxes be reduced?
$275 Taxes would be reduced by (Tax deduction) × (Tax rate) = $1,100 × 25% = $275.
If a $20,000 investment earns a 7 percent annual return, what should its value be after 5 years? Use Exhibit 1-A.
$28,060 Future value = $500 × 0.055 × 1 year = $27.50
anet is completing her federal income taxes for the year and has identified the amounts listed here. How much can she rightfully deduct? AGI: $42,000 Medical and dental expenses: $1,100 State income taxes: $1,000 Mortgage interest: $7,000 Qualified charitable contributions: $1,250
$3,350 Deductions include the following: State income tax + Mortgage interest + Charitable contributions = $1,000 + $7,000 + $1,250 = $9,250.Medical and dental expenses are not deductible because they must be greater than 10% of her AGI (42,000 × 10% = 4,200).
Gwen had three accounts as listed here. In 2020, how much was her total insurance coverage by the FDIC? Bank A: $250,000 Bank B: $50,000 Bank C: $300,000
$550,000 The maximum coverage in 2020 was $250,000 per insured institution. Therefore, Gwen received full coverage for Banks A and B and coverage up to $250,000 at Bank C. Her total coverage was $250,000 + $50,000 + $250,000 = $550,000.
If you have a $150,000, 30-year, 5 percent mortgage, how much of your first monthly payment of $805.23 would go toward interest?
$625.00 Interest = Principal × Interest rate × Time = $150,000 × 5% × 1 month/12 months = $625.00.
What is the APY for a savings account with a $250 balance that receives $9 interest for the year?
3.6% APY = 100 × (Interest/Principal) = 100 × ($9/$250) = 0.036, or 3.6%.
Penny knows that she needs to file her federal income taxes, but she is unable to do so by April 15. What form does she need to complete to obtain an automatic six-month extension?
4868
Quentin wants his retail purchases to be deducted directly from his checking account. Which of the following tools should he use?
A debit card
Which of the following allows an individual to receive a fixed amount of income over a certain period of time, or over his or her life?
A fixed annuity
Which of the following gives the landlord the right to take legal action against a tenant for nonpayment of rent or destruction of property?
A lease
Mark was severely injured while on vacation and expects to be unable to work for at least 12 months. Because of his injury, he should expect to be eligible for disability income from:
A public income insurance program.
What is the APY for a savings account with a $280 balance that receives $15 interest for the year? (Round your answer to 2 decimals.)
APY = 100 × (Interest/Principal) = 100 × ($15/$280) = 0.054, or 5.4%.
Molly is thinking about buying a type of whole life insurance policy, but she is not sure about how much she will need in the next few years. She may need to change her coverage as her needs change. Which of the following policies would meet her needs?
Adjustable life
When calculating federal income taxes, what increases "gross income"?
Alimony received
Homeowner's insurance typically covers all of the following except:
All of these are covered. personal property detached garage trees and shrubs a toolshed
Which of the following is NOT a valid credit application question?
All of these are valid credit application questions.
A few years ago, Simon Powell purchased a home for $170,000. Today, the home is worth $290,000. His remaining mortgage balance is $120,000. Assuming that Simon can borrow up to 65 percent of the market value, what is the maximum amount he can currently borrow against his home?
Amount available for borrowing = (Maximum loan percent × Current market value) − Current loan = (0.65 × $290,000) − $120,000= $68,500
A payday loan company charges 6 percent interest for a two-week period. What would be the annual interest rate from that company?(Assume an even 52 weeks per year. Enter your answer as a whole percent.)
Annual interest rate = Interest rate per period × Number of periods per year= 0.06 × (52/2) = 1.56, or 156%
The equation to calculate net worth is:
Assets − Liabilities = Net worth
What would be the average tax rate for a person who paid taxes of $4,706 on taxable income of $40,780? (Enter your answer as a percent rounded to 2 decimal places.)
Average tax rate = Total taxes/Taxable income= $4,706/$40,780= 0.1154, or 11.54%
see picture 1
Cash inflows − Cash outflows = Difference $3,620 − $3,258 = $362 $4,820 − $4,907 = −$87 $4,457 − $4,223 = $234 A positive difference indicates a cash surplus while a negative difference indicates a cash deficit.
Under Chapter 7 of the U.S. bankruptcy code,
Certain assets receive some protection.
Nora bought a used car and was told that she needed a personal check with guaranteed payment. She obtained a:
Certified check.
Samantha was driving on the highway during a storm and hail dented her car. This damage would be covered under her:
Comprehensive physical damage coverage.
A service contract:
Covers the repair costs of a product.
Carl Lester has liquid assets of $3,005 and current liabilities of $3,786. What is his current ratio? (Input ratio as a decimal. Round your answer to 2 decimal places.)
Current ratio = Liquid assets/Current liabilities= $3,005/$3,786= 0.79
The Fram family has liabilities of $138,000 and a net worth of $349,000. What is their debt ratio? (Input ratio as a decimal. Round your answer to 3 decimal places.)
Debt ratio = Liabilities/Net worth= $138,000/$349,000= 0.395
Which of the following is NOT a type of permanent life insurance?
Decreasing term
Julia Sims has $30,000 of adjusted gross income and $5,000 of medical expenses. She expects to itemize her tax deductions this year. The most recent tax year has a medical expenses floor of 10 percent. How much of a tax deduction for medical expenses will Julia be able to take?
Deductible medical expenses = Total medical expenses - (10% of adjusted gross income)= $5,000 − (0.10 × $30,000)= $2,000 If the deductible medical expenses are equal to or less than 10 percent of adjusted gross income, then there is no deduction for medical expenses.
The largest fixed expense associated with a new automobile is:
Depreciation
Judy and James have a 4-year-old child. They plan to purchase life insurance using this formula: Current income × 7 × 70%. Which method are they using to determine their life insurance needs?
Easy method
When Stanley was visiting Elaine, he tripped on her front porch step and sprained his ankle. His injuries were covered by:
Elaine's medical payments coverage.
Anna contributes pretax dollars to an account managed by her employer for her health care expenses. If she does not spend all of her money by the end of the year, she may forfeit it. What kind of plan does she have?
FSA
A benefit of investing in a certificate of deposit is the penalty for early withdrawal. This is a disadvantage of CDs.
False
A budget is a record of how a person or family has spent money. A budget is a record of how a person or family has spent money.
False
A cash flow statement uses this equation: Assets − Liabilities = Net worth. This equation is for a personal balance sheet.
False
A high debt ratio is best. The debt ratio is calculated as follows: Liabilities/Net worth. Therefore, a low debt ratio would be best.
False
A school ID that includes prepaid amounts for school lunches is called a debit card. A school ID that stores prepaid amounts may be a stored-value card or a smart card (if it is embedded with a microchip).
False
All citizens of the United States are required to file a federal income tax return if their income falls below a certain level. Citizens whose income is above a certain level are required to file.
False
An example of an excise tax is Social Security. Social Security is an example of a tax on earnings.
False
As borrowing by consumers and businesses increases, interest rates are likely to decrease. As borrowing by consumers and businesses increases, it is more likely that interest rates will increase. Interest rates are the "price" for money and as the demand for something increases relative to supply, price for that thing will increase.
False
Copies of tax returns and supporting data should be saved for 10 years. These should be saved for seven years.
False
Determining adjusted gross income is the final step in calculating federal income tax. Determining adjusted gross income (AGI) is the first step in calculating income taxes.
False
Interest earned is calculated by multiplying the principal times the time value of money. Interest earned = principal (amount in savings) × annual interest rate × time period (in years).
False
Interest paid on a home equity loan is not deductible. Interest paid on a home equity loan is not deductible
False
Making transactions using a credit card will immediately reduce your bank balance. Debit cards, or cash cards, allow you to spend your own funds from your bank account. Credit cards are separate from bank accounts.
False
One method to spend more money is to deduct an amount automatically from your salary in a direct deposit system. Automatically deducting an amount from your salary and depositing it in savings is one method to make saving easier. It is a form of "forced" savings and, therefore, reduced spending.
False
One of the most frequent filing errors is signing the return. A common error is NOT signing the return.
False
Opportunity costs refer to money already spent. An opportunity cost is what a person gives up when a choice is made to pursue a certain action.
False
Risks associated with many financial decisions are easy to identify and evaluate. These risks are difficult to identify and evaluate.
False
The "safety" concern with banks and credit unions refers to the potential loss of money due to investors' bad spending habits. The FDIC and NCUA provide insurance to prevent a loss of money due to the failure of an insured institution.
False
Joshua borrowed $500 on January 1, 2021, and paid $25 in interest. The bank charged him a service charge of $18. He paid it all back at once on December 31, 2021. What was the APR? (Enter your answer as a percent rounded to 1 decimal place.)
Finance charge = Interest + Service charge= $25 + $18= $43 APR = Finance charge/Principal= $43/$500= 0.086, or 8.6%
Joshua borrowed $1,500 for one year and paid $75 in interest. The bank charged him a service charge of $15. What is the finance charge on this loan?
Finance charge = Interest + Service charge= $75 + $15= $90
Would you prefer a fully taxable investment earning 10 percent or a tax-exempt investment earning 8.25 percent? (Assume a 24 percent tax rate.) Taxable investment earning 10 percent.Not attempted Tax-exempt investment earning 8.25 percent
Fully taxable investment: After-tax earnings = Pretax earnings × (1 − Tax rate)= 0.10 × (1 − 0.24)= 0.076, or 7.60% Tax-exempt investment: After-tax earnings = Pretax earnings= 8.25% You should prefer the investment with the higher after-tax earnings.
Kara George received a $20,000 gift for graduation from her uncle. If she deposits this in an account paying 5 percent, what will be the value of this gift in 11 years? Use Exhibit 1-A. (Round FV factor to 3 decimal places and final answer to the nearest whole dollar.)
Future value = $20,000 × 1.710 = $34,200
Tanya received a $1,180 loan from the bank for a vacation. The bank is using the simple interest formula for this one-year, 11.5 percent loan. What is her total interest?
I = P × r × T = $1,180 × 0.1150 × 1 year = $135.70.
What are the interest cost and the total amount due on a six-month loan of $2,400 at 13 percent simple annual interest?
Interest cost (I) = P × r × T= $2,400 × 0.130 × (6/12)= $156 Total amount due = Interest + Principal= $156 + $2,400= $2,556
Assume Samantha Jones had the following itemized deductions: Donations to church and other charities$ 5,050 Medical and dental expenses exceeding 10 percent of adjusted gross income$ 2,450 Mortgage interest$ 3,100 State income tax$ 2,920 Should she use the itemized deduction or the standard deduction? The standard deduction for her tax situation is $12,400.
Itemized deductions = Donations + Medical expenses in excess of 10% of AGI + Mortgage interest + State income tax= $5,050 + $2,450 + $3,100 + $2,920= $13,520 The standard deduction of $12,400 is less than itemizing deductions which totaled $13,520.
Janie has a joint account with her mother with a balance of $562,000. Based on $250,000 of Federal Deposit Insurance Corporation coverage, what amount of Janie's savings would not be covered by deposit insurance?
Janie's portion of joint account = 0.50 × $562,000= $281,000 Uninsured portion of Janie's account = Janie's portion of joint account − FDIC coverage amount= $281,000 − $250,000= $31,000
The settlement option that pays the life insurance proceeds to the beneficiary for as long as she or he lives is called:
Life income option.
Which of the following financial documents would most likely be stored in a safe deposit box or fireproof home safe?
Marriage certificates
Nancy is married to Jerry and needs to complete her tax form. They both earn about the same amount of money each year. What filing status would be best for them?
Married, filing a joint return
Given the following information, calculate the debt-payments ratio: (Round your answer to 2 decimal places.) Liabilities = $42,500Liquid assets = $8,500Monthly credit payments = $1,700Monthly savings = $1,300Net worth = $99,500Current liabilities = $3,400Take-home pay = $4,100Gross income = $8,900Monthly expenses = $5,640
Monthly credit payments/Take-home pay = 1,700/$4,100 = 0.41, or 41.46%
Veronica has had a variable-rate mortgage for several years. Unfortunately, the monthly mortgage payments have not covered her interest owed. As a result, her home equity is decreasing because of:
Negative amortization.
Jeanne wants to purchase a life insurance policy with guaranteed premiums. What kind of policy would she want to purchase?
Nonparticipating policy
What is the annual opportunity cost of a checking account that requires a $300 minimum balance to avoid service charges? Assume an interest rate of 3 percent. (Input the amount as a positive value.)
Opportunity cost = Required minimum balance × Interest rate= $300 × 0.03 = $9
Anything that may possibly cause a loss is called a:
Peril
Rebecca paid extra money to reduce her mortgage interest rate. That extra money is called:
Points
An advantage of investing in a 401(k) plan is the:
Possibility of receiving an employer match on your contributions.
Brenda plans to reduce her spending by $50 a month. What would be the future value of this reduced spending over the next 13 years? (Assume an annual deposit to her savings account and an annual interest rate of 3 percent.) Use Exhibit 1-B. (Round discount factor to 3 decimal places and final answer to 2 decimal places.)
Reduction in annual spending = Reduction in monthly spending × 12= $50 × 12= $600Future value of spending reduction = Reduction in annual spending × Future value annuity factor= $600 × 15.618= $9,370.80
A drawback of a regular savings account is A) A relatively low rate of return. B) A minimum required deposit. C) A possible penalty for early withdrawal. D) Not being insured. E) All of these are drawbacks of a regular savings account.
Relatively low rate of return
The expected value of a vehicle at the end of a lease is called the:
Residual value.
If you choose to wear your seat belt, you are using:
Risk reduction.
If inflation is expected to be 10.00 percent, how long will it take for prices to double?
Rule of 72: (72/10.00=7.20)
All of the following are sources of income except:
Social Security taxes.
Blue Cross and Blue Shield are:
Statewide organizations.
If Brenda wants to pay her fair share of taxes, no more and no less, she should practice:
Tax avoidance.
If $4,323 were withheld during the year and taxes owed were $4,122, would the person owe an additional amount or receive a refund? What is the amount? (Enter the amount as a positive value.)
Tax due (refund) = Total tax − Tax withheld= $4,122 − $4,323= −$201
If a person in a 32 percent tax bracket makes a deposit of $5,000 to a tax-deferred retirement account, what amount would be saved on current taxes?
Tax savings = Annual retirement contribution × Tax rate= $5,000 × 0.32= $1,600
With a 28 percent marginal tax rate, would a tax-free yield of 7 percent or a taxable yield of 9.5 percent give you a better return on your savings? Tax-free yield of 7 percent. Taxable yield of 9.5 percent.
Tax-free yield: After-tax yield = 7% Taxable yield:After-tax yield = Taxable yield × (1 − Tax rate)= 0.095 × (1 − 0.28)= 0.0684, or 6.84% The better return is the option that has the higher after-tax yield.
Based on the following data, would Beth and Roger Simmons receive a refund or owe additional taxes? What is the amount? (Enter the amount as a positive value.) Adjusted gross income$ 42,140 Standard deduction$ 24,800 Credit for child and dependent care expenses$ 400 Federal income tax withheld$ 2,017 Tax rate on taxable income10 percen
Taxable income would be $17,340 ($42,140 − $24,800) times the tax rate of 10 percent equals $1,734 less a tax credit of $400 gives a tax liability of $1,334. When compared to federal tax withheld ($2,017), the result is a refund of $683 ($2,017 − $1,334).
If Diane was in a 25% tax bracket and received a $2,800 tax credit, by how much would her taxes be reduced?
Taxes would be reduced by the full amount of the tax credit: $2,800.
Disposable income equals:
The amount a person or household has to spend.
Most tenants sign a lease. Which of the following is part of a lease agreement?
The conditions under which the landlord may enter the apartment.
Why are some financial service operations referred to as financial supermarkets?
They offer a combination of services from one source.
Given the information below, what is the total cost of renting peryear? Annual rent payments$ 14,400 Annual renter's insurance$ 300 Annual interest lost on security deposit$ 10 Value of apartment$ 150,000
Total annual cost of renting = Annual rent payments + Annual renter's insurance + Annual interest lost on security deposit = $14,400 + $300 + $10 = $14,710.
Daniel Simmons arrived at the following tax information: Gross salary$ 62,250 Interest earnings$ 75 Dividend income$ 140 Adjustments to income$ 850 Standard deduction$ 12,400 What amount would Daniel report as taxable income?
Total income = Gross salary + Dividend income + Interest earnings= $62,250 + $140 + $75= $62,465 Adjusted gross income = Total income − Adjustments= $62,465 − $850= $61,615 Taxable income = Adjusted gross income − Standard deduction= $61,615 − $12,400= $49,215
Reginald Sims deposits $5,500 each year in a tax-deferred retirement account. If he is in a 22 percent tax bracket, by what amount would his tax be reduced over a 20-year time period?
Total tax savings = (Annual retirement contribution × Tax rate) × Number of years= ($5,500 × 0.22) × 20= $24,200
A balance sheet reports what an individual or family owns and owes.
True
Adjusted gross income is reduced by the itemized or standard deduction.
True
An asset management account is an all-in-one account that is also called a cash management account.
True
An opportunity cost is what a person gives up when a choice is made.
True
Each year, check writing is being used less often.
True
Financial plans are created by individuals as well as by financial planners or by using a money management software package.
True
Inflation is a rise in the general level of prices and it reduces the buying power of the dollar.
True
Inflation is most harmful to people with fixed incomes.
True
Retirement planning includes thinking about your housing situation, recreational activities, and possible volunteer or part-time work.
True
Risks associated with many financial decisions are difficult to identify and evaluate.
True
Short-term goals are usually achieved within the next year or so.
True
The IRS has made online filing free for millions of taxpayers through the Free File Alliance.
True
The current financial position of an individual or family is a common starting point for financial planning.
True
When Marissa completes her taxes, she can include her qualified dependent children, her husband, and herself as exemptions.
True
When Ted needs more cash than he has available, his choices include liquidating savings and borrowing.
True
Allison has returned to school after five years out of the work force. She is taking one course at the local university for a cost of $1,500. To minimize her taxes, should she take a tuition and fees deduction or an education credit? (Assume a 15 percent tax rate.) (Assume the education credit will equal the entire cost of the course.) Tuition and fees deduction Education credit
Tuition and fees deduction = $1,500 × 0.15= $225 Education credit = $1,500 Thus, the education credit is the best option.
Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Which of the following riders should he consider?
Waiver of premium disability benefit
All of the following are warning signs of debt problems except:
You pay your credit card bills in full each period.
Claudette's grandchildren are 7 and 9 years old. When Claudette passed away, her grandchildren inherited her money. However, the will stipulated that they should not get control of the money until age 25. Which of the following should be set up to provide for the management and control of the funds?
a trust
Using the tax table, determine the amount of taxes for the following situations: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A head of household with taxable income of $55,000. b. A single person with taxable income of $35,000. c. Married taxpayers filing jointly with taxable income of $72,000.
a. A head of household with taxable income of $55,000:$14,100 × 0.10 = $1,410($53,700 − $14,101) × 0.12 = $4,751.88($55,000 − $53,701) × 0.22 = $285.78$1,410.00 + $4,751.88 + $285.78 = $6,447.66 b. A single person with taxable income of $35,000:$9,875 × 0.10 = $987.50($35,000 − $9,876) × 0.12 = $3,014.88$987.50 + $3,014.88 = $4,002.88 c. Married taxpayers filing jointly with taxable income of $72,000:$19,750 × 0.10 = $19,750.00($72,000 − $19,751) × 0.12 = $6,269.88$19,750.00 + $6,269.88 = $8,244.88
Robert Sampson owns a townhouse valued at $194,000 and still has an unpaid mortgage of $159,000. In addition to his mortgage, he has the following liabilities: Visa$ 905 MasterCard260 Discover card505 Education loan2,500 Personal bank loan400 Auto loan4,100 Total$ 8,670 Robert's net worth (not including his home) is about $48,000. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property. a. What is Robert's debt-to-equity ratio? (Round your answer to 2 decimal places.) b. Has he reached the upper limit of debt obligations?
a. Debt-to-equity ratio = Total debt excluding mortgage/Net worth excluding home= $8,670/$48,000= 0.18 b. The upper limit of the debt-to-equity ratio is 1, so he has not reached his upper limit.
a. The future value of a $1,375 savings deposit after seven years at an annual interest rate of 6 percent. (Round FV factor to 3 decimal places and final answer to 2 decimal places.) b. The future value of saving $3,350 a year for six years at an annual interest rate of 5 percent. (Round discount factor to 3 decimal places and final answer to 2 decimal places.) c. The present value of a $3,550 savings account that will earn 5 percent interest for three years. (Round PV factor to 3 decimal places and final answer to 2 decimal places.)
a. FV = $1,375 × 1.504 = $2,068.00 (Exhibit 1-A) b. FV = $3,350 × 6.802 = $22,786.70 (Exhibit 1-B) c. PV = $3,550 × 0.864 = $3,067.20 (Exhibit 1-C)
a. Assets$71,300−Liabilities$15,400=Net (?) b. Assets$89,500−Liabilities(?)=Net worth$25,500 c. Assets$37,080−Liabilities$13,665=Net (?) d. Assets(?)−Liabilities$40,645=Net worth$58,254
a.Net worth = Assets − Liabilities= $71,300 − $15,400= $55,900 b.Liabilities = Assets − Net worth= $89,500 − $25,500= $64,000 c.Net worth = Assets − Liabilities= $37,080 − $13,665= $23,415 d.Assets = Liabilities + Net worth= $40,645 + $58,254= $98,899
On December 30, you make a $3,000 charitable donation. a. If you are in the 24 percent tax bracket, how much will you save in taxes for the current year? (Assume your other itemized deductions exceed the standard deduction amount.) b. If you deposit that tax savings in a savings account for the next five years at 8 percent, what will be the future value of that account? Use Exhibit 1-A. (Round FV factor to 3 decimal places and final answer to 2 decimal places.)
a.Tax savings = Charitable donation × Tax rate= $3,000 × 0.24= $720 b.FV of tax savings = Tax savings × FV factor= $720 × 1.469= $1,057.68
Based on the following data, determine the amount of total assets, total liabilities, and net worth. Liquid assets$ 3,870 Investment assets$ 8,340 Current liabilities$ 2,670 Household assets$ 87,890 Long-term liabilities$ 76,230
a.Total assets = Liquid assets + Investment assets + Household assets= $3,870 + $8,340 + $87,890= $100,100 b.Total liabilities = Current liabilities + Long-term liabilities= $2,670 + $76,230= $78,900 c.Net worth = Total assets − Total liabilities= $100,100 − $78,900= $21,200
Based on the following data, determine the amount of total assets, total liabilities, and net worth. Liquid assets$ 3,920 Investment assets$ 8,390 Current liabilities$ 2,620 Household assets$ 88,390 Long-term liabilities$ 76,730
a.Total assets = Liquid assets + Investment assets + Household assets= $3,920 + $8,390 + $88,390= $100,700 b.Total liabilities = Current liabilities + Long-term liabilities= $2,620 + $76,730= $79,350 c.Net worth = Total assets − Total liabilities= $100,700 − $79,350= $21,350
Use the following items to determine the total assets, total liabilities, net worth, total cash inflows, and total cash outflows. Rent for the month$ 1,650 Monthly take-home salary$ 3,185 Spending for food$ 845 Cash in checking account$ 650 Savings account balance$ 2,090 Balance of educational loan$ 3,360 Current value of automobile$ 9,300 Telephone bill paid for month$ 165 Credit card balance$ 335 Loan payment$ 280 Auto insurance$ 430 Household possessions$ 5,400 Video equipment$ 2,850 Payment for electricity$ 190 Lunches/parking at work$ 280 Donations$ 360 Personal computer$ 2,200 Value of stock investment$ 1,360 Clothing purchase$ 210 Restaurant spending$ 230
a.Total assets = Savings account balance + Current value of automobile + Video equipment + Personal computer + Cash in checking account + Household possessions + Value of stock investment= $2,090 + $9,300 + $2,850 + $2,200 + $650 + $5,400 + $1,360= $23,850 b.Total liabilities = Credit card balance + Educational loan balance= $335 + $3,360= $3,695 c.Net worth = Total assets − Total liabilities= $23,850 − $3,695= $20,155 d.Total cash inflows = Monthly take-home salary= $3,185 e.Total cash outflows = Rent for the month + Spending for food + Auto insurance + Lunches/parking at work + Clothing purchase + Telephone bill paid for month + Loan payment + Payment for electricity + Donations + Restaurant spending= $1,650 + $845 + $430 + $280 + $210 + $165 + $280 + $190 + $360 + $230= $4,640
Using the following balance sheet items and amounts, calculate the total liquid assets and total current liabilities. Money market account$ 2,850 Medical bills$ 302 Mortgage$ 163,000 Checking account$ 830 Retirement account$ 89,400 Credit card balance$ 539
a.Total liquid assets = Money market account + Checking account= $2,850 + $830= $3,680 b.Total current liabilities = Medical bills + Credit card balance= $302 + $539= $841
If you miss payments on a home equity loan, you can lose your:
house
Which of the following ratios indicates the number of months in which living expenses can be paid if an emergency arises?
liquidity ratio
When creating a personal balance sheet, which of the following is a current liability?
medical bill
Resolution of any purchase concerns is part of the ____ phase of the research-based buying process.
postpurchase activities
