Question 1

A decrease in net worth would be the result of:

Accepted Answer

A)  income greaterthan expenses for a month.
B)  expenses greaterthan income for a month.
C)  assets greaterthan expenses.
D)  increased earnings on the job.
E)  income and expenses equal for a month.F) B) and D)
G) C) and D)

Question 2

Personal recordscurrent budget, cheque book(s) and bank statements.

Accepted Answer

A) True 
 B)False

Question 3

A common deduction from a person's paycheck is for

Accepted Answer

A)  interest.
B)  unemployment
C)  rent.
D)  taxes.
E)  current liabilities.F) C) and D)
G) A) and D)

Question 4

Leveraged investing in common shares is expected to increase your net worth.

Accepted Answer

A) True 
 B)False

Question 5

Opportunity cost refers to:

Accepted Answer

A)  current spending habits.
B)  changing economic conditions that affect a person's cost of living.
C)  storage facilities to make financial documents easily available.
D)  trade-offs associated with financial decisions.
E)  avoiding the use of consumer credit.F) A) and E)
G) B) and E)

Question 6

An exampleof a personal and employment document is a:

Accepted Answer

A)  Social Insurance card.
B)  passbook.
C)  budget
D)  property tax bill.
E)  lease.F) B) and C)
G) A) and C)

Question 7

The components of money management activities are:

Accepted Answer

A)  Sorting, Creating personal financial statements and implementing a budget
B)  Balancing incomeswith expenses
C)  Saving for retirement
D)  Balancing currentspending with the opportunity costE) All of the above
F) A) and D)

Question 8

The paymentitems that should be budgeted first are

Accepted Answer

A)  variable expenses.
B)  investment funds.
C)  fixed expenses.
D)  unplanned living expenses.
E)  entertainment expenses.F) C) and E)
G) B) and C)

Question 9

The Crown family has a difficult time staying on a budget.In an effort to actually see what funds are available for various expenses, a ____________ budget would be most appropriate.

Accepted Answer

A)  written
B)  computerized
C)  physical
D)  deficit
E)  mentalF) C) and E)
G) D) and E)

Question 10

Insolvency is the inability to pay debts by the due date, because liabilities exceed the value of assets.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would be considered a long-term liability?

Accepted Answer

A)  A charge accountpayment
B)  A mortgage
C)  An installment loan
D)  An amount due for taxes
E)  The amount due on a credit cardF) B) and C)
G) C) and D)

Question 12

Current liabilities differ from long-term liabilities based on

Accepted Answer

A)  the amount owed.
B)  the financial situation of the creditor.
C)  the interest rate charged.
D)  when the debt is due.
E)  current economic conditions.F) C) and E)
G) B) and C)

Question 13

Changes in the cost of living are

Accepted Answer

A)  different in variousgeographic areas.
B)  the same for different locations.
C)  constant from month to month.
D)  the same for all goods and services.
E)  not a factor when preparing a budget.F) A) and E)
G) A) and D)

Question 14

Medical expenses, clothing, and telephone are examples of fixed expenses.

Accepted Answer

A) True 
 B)False

Question 15

Warranties are commonly associated with ____________ purchases.

Accepted Answer

A)  investment
B)  insurance
C)  consumer
D)  financial services
E)  creditF) C) and E)
G) A) and D)

Question 16

A family with $170,000 in assets and $152,000 of liabilities would have a net worth of:

Accepted Answer

A)  $70,000.
B)  $22,000.
C)  $18,000
D)  $92,000.
E)  $41,000.F) B) and D)
G) B) and C)

Question 17

A cash flow statement is a record of how a person or family has earned and spent their money.

Accepted Answer

A) True 
 B)False

Question 18

Money manage refers to

Accepted Answer

A)  Day-to-day financial activities
B)  Long term financial activities
C)  Asset management
D)  Investment managementE) A) and B)
F) B) and C)

Question 19

Spending money on current living expenses reduces the amount you can use for saving and investing for long-term financial security is an example of a(n) :

Accepted Answer

A)  Opportunity cost
B)  Cash flow management
C)  Spending habits
D)  Savings planE) B) and C)
F) A) and D)

Question 20

Most income tax documents and records should be kept in a safety deposit box.

Accepted Answer

A) True 
 B)False

Exam 2: Money Management Strategy: Financial Statements and Budgeting

The paymentitems that should be budgeted first are

Correct AnswerverifiedShow Answer

The Crown family has a difficult time staying on a budget.In an effort to actually see what funds are available for various expenses, a ____________ budget would be most appropriate.

Correct AnswerverifiedShow Answer

Changes in the cost of living are

Correct AnswerverifiedShow Answer

A cash flow statement is a record of how a person or family has earned and spent their money.

Correct AnswerverifiedShow Answer

Which of the following would be considered a long-term liability?

Correct AnswerverifiedShow Answer

Money manage refers to

Correct AnswerverifiedShow Answer

An exampleof a personal and employment document is a:

Correct AnswerverifiedShow Answer

Spending money on current living expenses reduces the amount you can use for saving and investing for long-term financial security is an example of a(n) :

Correct AnswerverifiedShow Answer

Most income tax documents and records should be kept in a safety deposit box.

Correct AnswerverifiedShow Answer

Warranties are commonly associated with ____________ purchases.

Correct AnswerverifiedShow Answer

Opportunity cost refers to:

Correct AnswerverifiedShow Answer

A family with $170,000 in assets and $152,000 of liabilities would have a net worth of:

Correct AnswerverifiedShow Answer

A common deduction from a person's paycheck is for

Correct AnswerverifiedShow Answer

Leveraged investing in common shares is expected to increase your net worth.

Correct AnswerverifiedShow Answer

A decrease in net worth would be the result of:

Correct AnswerverifiedShow Answer

Personal recordscurrent budget, cheque book(s) and bank statements.

Correct AnswerverifiedShow Answer

Medical expenses, clothing, and telephone are examples of fixed expenses.

Correct AnswerverifiedShow Answer

Insolvency is the inability to pay debts by the due date, because liabilities exceed the value of assets.

Correct AnswerverifiedShow Answer

Current liabilities differ from long-term liabilities based on

Correct AnswerverifiedShow Answer

The components of money management activities are:

Correct AnswerverifiedShow Answer

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