Question 1

When a cash surplus exists on your income and expenditure statements,you can:

Accepted Answer

A)   acquire assets.
B)   pay off existing debts.
C)   increase your savings.
D)   increase your investments.
E)   do any of the above.F) A) and B)
G) C) and D)

Question 2

Elena purchased a stamp collection for $5,000 thirty years ago.If it appreciated 8% annually,what is it worth today?

Accepted Answer

A)   $17,000
B)   $36,400
C)   $50,313
D)   $123,023
E)   $150,000F) A) and D)
G) C) and D)

Question 3

In a budget,"fun money" is a budget category used for family members to spend as they like without having to account for how it is spent.

Accepted Answer

A) True 
 B)False

Question 4

The need for budget adjustments is indicated when:

Accepted Answer

A)   income is stable.
B)   account deficits and surpluses balance out.
C)   account deficits are more than surpluses.
D)   a new calendar year begins.
E)   short-term financial goals are achieved.F) C) and D)
G) All of the above

Question 5

Jacque's total monthly loan payments are $1,020 while her gross income is $3,000 per month.What is her debt service ratio?

Accepted Answer

A)   34%
B)   43%
C)   50%
D)   75%
E)   82%F) D) and E)
G) All of the above

Question 6

A charge made on your credit card becomes a liability as soon as the charge is incurred.

Accepted Answer

A) True 
 B)False

Question 7

Net worth is highest at about what age?

Accepted Answer

A)   45
B)   55
C)   65
D)   75
E)   85F) C) and D)
G) B) and C)

Question 8

If your statement of income and expenditures shows a deficit,you may have:

Accepted Answer

A)   increased your debts.
B)   increased your assets.
C)   added to savings.
D)   taken a cash loan on your insurance.
E)   sold some securities.F) A) and B)
G) A) and C)

Question 9

The level of the debt service ratio would indicate your ability to meet loan payments out of current income.

Accepted Answer

A) True 
 B)False

Question 10

_____ would be an example of a periodic expense.

Accepted Answer

A)   Food
B)   Vacation
C)   Utilities
D)   Taxes
E)   none of theseF) A) and D)
G) D) and E)

Question 11

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-A deficit on your income/expense statement will have [an | no] effect on your balance sheet.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

Budgets are:

Accepted Answer

A)   restrictive.
B)   complicated.
C)   forward looking.
D)   permanent.
E)   unnecessary.F) B) and D)
G) A) and E)

Question 13

Jewelry,furniture,and computers are examples of personal property.

Accepted Answer

A) True 
 B)False

Question 14

Budgeting and record keeping are really the same activity.

Accepted Answer

A) True 
 B)False

Question 15

I should not record _____ on an income and expense statement for the period from January 1 to June 30.

Accepted Answer

A)   an $800 refrigerator bought on credit on May 30
B)   a paid March telephone bill
C)   health insurance premiums deducted from monthly pay checks
D)   checking account service charges
E)   groceries bought and paid for in JuneF) A) and C)
G) All of the above

Question 16

Construct a balance sheet from the following information.Be sure the format is correct.

Accepted Answer

The answer of Construct a balance sheet from the following...

Question 17

Inflation is expected to be 3 percent in the coming year.If Mr.Gonza earned $45,000 this year,how much must he earn the following year just to keep up with inflation and maintain the balance between his income and his increasing expenditures?

Accepted Answer

To keep up with an inflation of 3% in th...

Question 18

Russ buys his wife a valuable painting for $20,000.He purchases it using $15,000 from his savings and a $5,000 loan.How does this transaction affect Russ' balance sheet?

Accepted Answer

A)   His assets increase
B)   His liabilities increase
C)   His net worth stays the same
D)   a and b only
E)   a,b and cF) B) and D)
G) B) and C)

Question 19

The expenditure categories for your budget should be determined by:

Accepted Answer

A)   the BLS Urban Family Budget categories.
B)   purchased budget book headings.
C)   the affordability to meet the expenses.
D)   current and expected future spending.
E)   itemized tax deductions.F) A) and D)
G) None of the above

Question 20

Using time value of money is most important when planning for short-term goals.

Accepted Answer

A) True 
 B)False

Exam 2: Using Financial Statements and Budgets

Using time value of money is most important when planning for short-term goals.

Correct AnswerverifiedShow Answer

Elena purchased a stamp collection for $5,000 thirty years ago.If it appreciated 8% annually,what is it worth today?

Correct AnswerverifiedShow Answer

Russ buys his wife a valuable painting for $20,000.He purchases it using $15,000 from his savings and a $5,000 loan.How does this transaction affect Russ' balance sheet?

Correct AnswerverifiedShow Answer

Jewelry,furniture,and computers are examples of personal property.

Correct AnswerverifiedShow Answer

A charge made on your credit card becomes a liability as soon as the charge is incurred.

Correct AnswerverifiedShow Answer

Budgets are:

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The need for budget adjustments is indicated when:

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When a cash surplus exists on your income and expenditure statements,you can:

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The level of the debt service ratio would indicate your ability to meet loan payments out of current income.

Correct AnswerverifiedShow Answer

In a budget,"fun money" is a budget category used for family members to spend as they like without having to account for how it is spent.

Correct AnswerverifiedShow Answer

Jacque's total monthly loan payments are $1,020 while her gross income is $3,000 per month.What is her debt service ratio?

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Budgeting and record keeping are really the same activity.

Correct AnswerverifiedShow Answer

I should not record _____ on an income and expense statement for the period from January 1 to June 30.

Correct AnswerverifiedShow Answer

Construct a balance sheet from the following information.Be sure the format is correct.

Correct AnswerverifiedShow Answer

If your statement of income and expenditures shows a deficit,you may have:

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_____ would be an example of a periodic expense.

Correct AnswerverifiedShow Answer

The expenditure categories for your budget should be determined by:

Correct AnswerverifiedShow Answer

Inflation is expected to be 3 percent in the coming year.If Mr.Gonza earned $45,000 this year,how much must he earn the following year just to keep up with inflation and maintain the balance between his income and his increasing expenditures?

Correct AnswerverifiedTo keep up with an inflation of 3% in th...View AnswerShow Answer

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -A deficit on your income/expense statement will have [an | no] effect on your balance sheet.

Correct AnswerverifiedShow Answer

Net worth is highest at about what age?

Correct AnswerverifiedShow Answer

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To keep up with an inflation of 3% in th...
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