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Financial Statements And Budgeting

Instructions:

Answer 38 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. What are the 3 components of money management?
The amount of money you make before taxes or deductions
Cash flow - keeping records - plan (budget)
Sell your assets - get another job
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

2. What 3 components are listed on a personal balance sheet?
Cash flow - keeping records - plan (budget)
Assets - liabilities - net worth
Personal income and expenditure statement
Personal income and expenditure statement

3. What is a liquid asset?
Assets - liabilities = net worth
Assets - liabilities - net worth
Fixed you know whats being payed each month
Cash and items that are easily converted to cash

4. What 3 things are spending decisions based upon?
Needs - goals - personal situation
Record income - record cash outflows - determine net cash flows
Cash and items that are easily converted to cash
FOREVER

5. What types of records would be stored on a home computer?
6 years
Paper that you give to your employer telling them how much money to take out of your taxes
Budget - summary of checks - Convenience
Daily spending - saving decisions

6. How long should you keep birth certificates - social security cards - etc?
Day to day financial activities used to manage personal financial stuff and security
Personal employment records - tax records
FOREVER
What you owe

7. How is a net can flow determined?
Money you make subtracted from how much you spend
Personal income and expenditure statement
Fixed - variable
Record income - record cash outflows - determine net cash flows

8. How is net worth calculated?
6 years
Assets - liabilities = net worth
Cash or check
What you owe

9. What are various types of liabilities?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
6 years
Forever

10. Liabilities?
What you owe
Day to day financial activities used to manage personal financial stuff and security
Assessing (goals) - Planning (budget)
Real estate - personal possessions - investment assets

11. Assets?
Cash flow - keeping records - plan (budget)
What you own
Cash and items that are easily converted to cash
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates

12. What is a personal balance sheet?
Handling daily business - bills payed on time - taxes - investments
A sheet of your finances that helps you come to terms with your net worth
Inability to pay debts when they're due
The amount of money you make before taxes or deductions

13. What is a w-4?
Paper that you give to your employer telling them how much money to take out of your taxes
Cash or check
Daily spending - saving decisions
Current (less 1 year) credit card bill - long term (more than a year) mortgage

14. What are some oppertunity cost associated with money management?
How ever long you need it!
Fixed you know whats being payed each month
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money

15. What are some sources of income?
Record income - record cash outflows - determine net cash flows
Investments - wages - interest
Balance sheet - cash flow statement - budget
Indicates the difference between your total assets total liabilities at any given date.

16. What are the various types of assets?
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Real estate - personal possessions - investment assets
Record income - record cash outflows - determine net cash flows
Investments - wages - interest

17. How long should you keep records on personal property and investments?
Record income - record cash outflows - determine net cash flows
Assets - liabilities = net worth
How ever long you need it!
Cash and items that are easily converted to cash

18. What are the 3 components of a cash flow statement?
Daily spending - saving decisions
Needs - goals - personal situation
Assets - liabilities = net worth
Record income - record cash outflows - determine net cash flows

19. Insolvency?

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20. What is the difference between a fixed and variable expense?
Day to day financial activities used to manage personal financial stuff and security
Assessing (goals) - Planning (budget)
A sheet of your finances that helps you come to terms with your net worth
Fixed you know whats being payed each month

21. How long should you keep tax return forms?
6 years
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Budget - summary of checks - Convenience
Personal income and expenditure statement

22. How can net worth be increased?
Paper that you give to your employer telling them how much money to take out of your taxes
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Sell your assets - get another job
Assets - liabilities - net worth

23. How long should you keep records on real estate?
Net worth statement
Forever
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Handling daily business - bills payed on time - taxes - investments

24. Net worth?
Day to day financial activities used to manage personal financial stuff and security
Cash flow - keeping records - plan (budget)
Indicates the difference between your total assets total liabilities at any given date.
Net worth statement

25. Cash flow can also be called?
Personal income and expenditure statement
Assets - liabilities = net worth
Money you make subtracted from how much you spend
What you owe

26. What is at the heart of financial planning?
Assets - liabilities = net worth
Daily spending - saving decisions
Day to day financial activities used to manage personal financial stuff and security
6 years

27. What are the steps in the budgeting process?
Personal income and expenditure statement
Cash flow - keeping records - plan (budget)
Assessing (goals) - Planning (budget)
What you owe

28. What are 3 types of personal financial statements?
Balance sheet - cash flow statement - budget
Net worth statement
Paper that you give to your employer telling them how much money to take out of your taxes
Investments - wages - interest

29. What are the 2 types of cash outflows?
Fixed - variable
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Day to day financial activities used to manage personal financial stuff and security
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money

30. What types of records go in a home file?
Personal income and expenditure statement
Cash or check
What you owe
Personal employment records - tax records

31. What is a cash flow statement?
A sheet of your finances that helps you come to terms with your net worth
Real estate - personal possessions - investment assets
Sell your assets - get another job
Personal income and expenditure statement

32. What is the purpose of personal financial statements?
Assets - liabilities - net worth
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Budget - summary of checks - Convenience
FOREVER

33. What is a balance sheet also called?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Money you make subtracted from how much you spend
Inability to pay debts when they're due
Net worth statement

34. What 2 ways can a person be paid?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Cash or check
Cash flow - keeping records - plan (budget)
What you own

35. What types of records go in a safety deposit box?
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
How ever long you need it!
Cash flow - keeping records - plan (budget)
Assessing (goals) - Planning (budget)

36. What are the benefits of having an organized system for financial records?
Balance sheet - cash flow statement - budget
Handling daily business - bills payed on time - taxes - investments
Assets - liabilities - net worth
6 years

37. What is money management?
Investments - wages - interest
Day to day financial activities used to manage personal financial stuff and security
How ever long you need it!
Money you make subtracted from how much you spend

38. What is gross pay?
Record income - record cash outflows - determine net cash flows
Assessing (goals) - Planning (budget)
The amount of money you make before taxes or deductions
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money