Question 1

Janice spends a total of $1,900 a month to cover all living expenses.Which of the following would represent the maximum suggested acceptable emergency fund?

Accepted Answer

A)  Zero
B)  $1,900
C)  $3,800
D)  $11,400
E)  $5,700F) A) and E)
G) A) and D)

Question 2

Which of the following financial documents would most likely be stored in a safety deposit box?

Accepted Answer

A)  Company pensioninformation
B)  Personal financial statements
C)  Warranties
D)  Birth, marriage and death certificates
E)  Checking accountstatementsF) A) and D)
G) C) and D)

Question 3

Payments that do not vary from month to month are ____________ expenses.

Accepted Answer

A)  fixed
B)  current
C)  variable
D)  luxury
E)  budgetedF) B) and D)
G) All of the above

Question 4

Investments are funds set aside for:

Accepted Answer

A)  Short term needs
B)  Long term needs
C)  Both short and long term needs
D)  Moderate term needs
E)  EmergenciesF) B) and D)
G) A) and E)

Question 5

Comparison shopping can save you money and improve the quality of your purchases but uses up something of value you cannot replace: your time is an example of a(n) :

Accepted Answer

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

Question 6

Common reasonsfor saving money include:

Accepted Answer

A)  To set aside money for irregular and unexpected expenses
B)  To pay for the replacement of expensive items, such as appliances or an automobile, or to have money for a down payment on a house
C)  To buy specialitems, such as home video or recreational equipment, or to pay for a vacation
D)  To providefor long-term expenses, such as the education of children or retirement.
E)  All of the aboveF) A) and D)
G) None of the above

Question 7

When it comes to savings, most Canadians

Accepted Answer

A)  have an adequate emergency fund.
B)  use severaldifferent savings techniques.
C)  find saving difficult.
D)  keep substantial amounts in a regular savings account.
E)  reduce the amount they save during their workinglife.F) A) and B)
G) A) and C)

Question 8

Insolvency is a result of having an unequalbalance of tangible and intangible goods.

Accepted Answer

A) True 
 B)False

Question 9

A budget is a record of how a person or family has spent their money.

Accepted Answer

A) True 
 B)False

Question 10

A personal cash flow statement presents income and outflows of cash for a given time period, such as a month.

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 36 month car loan
C)  An installment loan
D)  An amount due for taxes
E)  The amount due on a credit cardF) D) and E)
G) B) and D)

Question 12

During the last month, Mary Jane had expenses of $5,000 and an increase in net worth of $700.This means Mary Jane's income for the month was:

Accepted Answer

A)  $700.
B)  $4,300.
C)  $5,000.
D)  $5,700.
E)  $5,200.F) A) and C)
G) B) and C)

Question 13

A cash flow statement reports a person's or a family's

Accepted Answer

A)  net worth.
B)  current income and payments.
C)  plan for spending.
D)  value of investments.
E)  balance of savings.F) B) and E)
G) None of the above

Question 14

If a family plannedto spend $370 for food during March but only spent $348, this difference would be referred to as a

Accepted Answer

A)  surplus.
B)  deficit.
C)  fixed living expense.
D)  budget reduction.
E)  contribution to net worth.F) C) and D)
G) None of the above

Question 15

Janice spends a total of $1,500 a month to cover all living expenses.Which of the following would represent the minimum appropriate emergency fund?

Accepted Answer

A)  $1,500 to $4,500
B)  $3,000 to $7,500
C)  $4,500 to $9,000
D)  $5,000 to $10,000
E)  $6,000 to $12,000F) A) and B)
G) A) and D)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The main purposeof a budget is to help you

Accepted Answer

A)  Live within your income and spend your money wisely
B)  Prioritize and attain your financial goals
C)  Prepare for financial emergencies
D)  Develop wise financial management habits
E)  All of the aboveF) All of the above
G) C) and D)

Question 18

A person's net worth would increase as a result of

Accepted Answer

A)  increased value on investments
B)  reduced earnings.
C)  increased spending for current living expenses.
D)  decreased value of personal possessions.
E)  increased amountsowed to others.F) None of the above
G) C) and D)

Question 19

Definite financial obligations are referred to as variable expenses.

Accepted Answer

A) True 
 B)False

Question 20

Furniture, jewelry, and an automobile are examples of liquid assets.

Accepted Answer

A) True 
 B)False

Exam 2: Money Management Strategy: Financial Statements and Budgeting

Janice spends a total of $1,900 a month to cover all living expenses.Which of the following would represent the maximum suggested acceptable emergency fund?

Correct AnswerverifiedShow Answer

During the last month, Mary Jane had expenses of $5,000 and an increase in net worth of $700.This means Mary Jane's income for the month was:

Correct AnswerverifiedShow Answer

Furniture, jewelry, and an automobile are examples of liquid assets.

Correct AnswerverifiedShow Answer

Definite financial obligations are referred to as variable expenses.

Correct AnswerverifiedShow Answer

Janice spends a total of $1,500 a month to cover all living expenses.Which of the following would represent the minimum appropriate emergency fund?

Correct AnswerverifiedShow Answer

When it comes to savings, most Canadians

Correct AnswerverifiedShow Answer

A budget is a record of how a person or family has spent their money.

Correct AnswerverifiedShow Answer

Payments that do not vary from month to month are ____________ expenses.

Correct AnswerverifiedShow Answer

The main purposeof a budget is to help you

Correct AnswerverifiedShow Answer

Investments are funds set aside for:

Correct AnswerverifiedShow Answer

Comparison shopping can save you money and improve the quality of your purchases but uses up something of value you cannot replace: your time is an example of a(n) :

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following financial documents would most likely be stored in a safety deposit box?

Correct AnswerverifiedShow Answer

A personal cash flow statement presents income and outflows of cash for a given time period, such as a month.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Common reasonsfor saving money include:

Correct AnswerverifiedShow Answer

If a family plannedto spend $370 for food during March but only spent $348, this difference would be referred to as a

Correct AnswerverifiedShow Answer

Insolvency is a result of having an unequalbalance of tangible and intangible goods.

Correct AnswerverifiedShow Answer

A cash flow statement reports a person's or a family's

Correct AnswerverifiedShow Answer

A person's net worth would increase as a result of

Correct AnswerverifiedShow Answer

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