Question 1

An individual retirement account is an example of a(n)  ____________ asset.

Accepted Answer

A)   liquid
B)   common
C)   investment
D)   household
E)   budgetedF) None of the above
G) B) and E)

Question 2

Which of the following situations is a person who could be insolvent?

Accepted Answer

A)   Assets $50,000; annual expenses $60,000
B)   Assets $68,000; net worth $22,000
C)   Liabilities $45,000; net worth $6,000
D)   Assets $5,000; liabilities $6,000
E)   Annual cash inflows $48,000; liabilities $50,000F) A) and C)
G) B) and D)

Question 3

Most Canadians have an adequate savings for emergencies.

Accepted Answer

A) True 
 B)False

Question 4

A person's net worth is the difference between the value of the items owned and the amounts owed to others.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following financial documents would most likely be stored in a home file?

Accepted Answer

A)   Serial numbers of expensive items
B)   Personal financial statements
C)   Mortgage papers, title deed
D)   Birth, marriage and death certificates
E)   Guaranteed investment securitiesF) C) and D)
G) A) and D)

Question 6

A major expenditure for most families is

Accepted Answer

A)   insurance.
B)   contributions.
C)   clothing.
D)   utilities.
E)   transportation.F) B) and E)
G) C) and D)

Question 7

Which of the following are considered to be personal financial statements?

Accepted Answer

A)   Budget and credit card statements
B)   Balance sheet and cash flow statement
C)   Checkbook and budget
D)   Tax returns
E)   Bank statement and savings passbookF) B) and C)
G) A) and D)

Question 8

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

Accepted Answer

A)   Company pension information
B)   Personal financial statements
C)   Warranties
D)   Birth, marriage and death certificates
E)   Checking account statementsF) A) and D)
G) A) and B)

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

Janice spends a total of $1,500 a month to cover all living expenses. Which of the following would represent the 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) None of the above
G) B) and C)

Question 11

Changes in the cost of living are

Accepted Answer

A)   different in various geographic 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) C) and E)
G) B) and D)

Question 12

Items with a monetary worth are referred to as:

Accepted Answer

A)   liabilities.
B)   variable expenses.
C)   net worth.
D)   income.
E)   assets.F) All of the above
G) B) and E)

Question 13

A person's lifestyle is a reflection of his or her values, goals, career, and family situation.

Accepted Answer

A) True 
 B)False

Question 14

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) A) and E)
G) C) and D)

Question 15

"Sharing the bills" is a budgeting strategy for two-income households where each partner contributes an equal amount into the pool.

Accepted Answer

A) True 
 B)False

Question 16

Liabilities are amounts representing

Accepted Answer

A)   taxable income
B)   items of value.
C)   living expenses.
D)   debts
E)   current assets.F) None of the above
G) A) and C)

Question 17

During the past month, Jennifer Sinnet had income of $3,500 and a decrease in net worth of $200. This means Jennifer's payments for the month were:

Accepted Answer

A)   $3,700.
B)   $3,300.
C)   $2,800.
D)   $1,000.
E)   $200.F) A) and B)
G) C) and E)

Question 18

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) A) and D)
G) B) and E)

Question 19

A family with $70,000 in assets and $22,000 of liabilities would have a net worth of:

Accepted Answer

A)   $70,000.
B)   $22,000.
C)   $48,000
D)   $92,000.
E)   $41,000.F) A) and B)
G) A) and C)

Question 20

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

Exam 2: Money Management Strategy: Financial Statements and Budgeting

Items with a monetary worth are referred to as:

Correct AnswerverifiedShow Answer

Which of the following financial documents would most likely be stored in a home file?

Correct AnswerverifiedShow Answer

A person's net worth is the difference between the value of the items owned and the amounts owed to others.

Correct AnswerverifiedShow Answer

A person's lifestyle is a reflection of his or her values, goals, career, and family situation.

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

An individual retirement account is an example of a(n) ____________ asset.

Correct AnswerverifiedShow Answer

During the past month, Jennifer Sinnet had income of $3,500 and a decrease in net worth of $200. This means Jennifer's payments for the month were:

Correct AnswerverifiedShow Answer

Liabilities are amounts representing

Correct AnswerverifiedShow Answer

"Sharing the bills" is a budgeting strategy for two-income households where each partner contributes an equal amount into the pool.

Correct AnswerverifiedShow Answer

Which of the following situations is a person who could be insolvent?

Correct AnswerverifiedShow Answer

Current liabilities differ from long-term liabilities based on

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

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

Correct AnswerverifiedShow Answer

A major expenditure for most families is

Correct AnswerverifiedShow Answer

Changes in the cost of living are

Correct AnswerverifiedShow Answer

Most Canadians have an adequate savings for emergencies.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following are considered to be personal financial statements?

Correct AnswerverifiedShow Answer

A family with $70,000 in assets and $22,000 of liabilities would have a net worth of:

Correct AnswerverifiedShow Answer

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