Test your basic knowledge |

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 benefits of having an organized system for financial records?
Daily spending - saving decisions
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Assessing (goals) - Planning (budget)
Handling daily business - bills payed on time - taxes - investments

2. What is gross pay?
Assets - liabilities - net worth
Investments - wages - interest
Paper that you give to your employer telling them how much money to take out of your taxes
The amount of money you make before taxes or deductions

3. What is the purpose of personal financial statements?
Personal income and expenditure statement
Fixed - variable
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Assets - liabilities = net worth

4. What are various types of liabilities?
Inability to pay debts when they're due
6 years
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Day to day financial activities used to manage personal financial stuff and security

5. What types of records would be stored on a home computer?
Day to day financial activities used to manage personal financial stuff and security
A sheet of your finances that helps you come to terms with your net worth
Assets - liabilities = net worth
Budget - summary of checks - Convenience

6. What is the difference between a fixed and variable expense?
Assessing (goals) - Planning (budget)
Fixed you know whats being payed each month
Inability to pay debts when they're due
Personal employment records - tax records

7. What types of records go in a safety deposit box?
Budget - summary of checks - Convenience
Assets - liabilities - net worth
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Forever

8. How long should you keep records on real estate?
Fixed - variable
Balance sheet - cash flow statement - budget
Forever
Handling daily business - bills payed on time - taxes - investments

9. What 2 ways can a person be paid?
Handling daily business - bills payed on time - taxes - investments
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Record income - record cash outflows - determine net cash flows
Cash or check

10. What are the various types of assets?
Assets - liabilities = net worth
Real estate - personal possessions - investment assets
Paper that you give to your employer telling them how much money to take out of your taxes
Daily spending - saving decisions

11. Assets?
Budget - summary of checks - Convenience
Cash and items that are easily converted to cash
What you owe
What you own

12. What is a cash flow statement?
Inability to pay debts when they're due
Cash and items that are easily converted to cash
The amount of money you make before taxes or deductions
Personal income and expenditure statement

13. What is money management?
Record income - record cash outflows - determine net cash flows
Day to day financial activities used to manage personal financial stuff and security
Balance sheet - cash flow statement - budget
Fixed - variable

14. What is a w-4?
Cash flow - keeping records - plan (budget)
Paper that you give to your employer telling them how much money to take out of your taxes
Investments - wages - interest
Inability to pay debts when they're due

15. What 3 components are listed on a personal balance sheet?
Sell your assets - get another job
Forever
Assets - liabilities - net worth
Real estate - personal possessions - investment assets

16. What are the 2 types of cash outflows?
Inability to pay debts when they're due
Assessing (goals) - Planning (budget)
Fixed - variable
What you owe

17. What is a balance sheet also called?
The amount of money you make before taxes or deductions
Net worth statement
Personal employment records - tax records
Fixed you know whats being payed each month

18. How long should you keep records on personal property and investments?
Day to day financial activities used to manage personal financial stuff and security
The amount of money you make before taxes or deductions
Budget - summary of checks - Convenience
How ever long you need it!

19. Cash flow can also be called?
Paper that you give to your employer telling them how much money to take out of your taxes
Personal income and expenditure statement
Handling daily business - bills payed on time - taxes - investments
What you own

20. What are the 3 components of a cash flow statement?
Indicates the difference between your total assets total liabilities at any given date.
FOREVER
Record income - record cash outflows - determine net cash flows
Cash flow - keeping records - plan (budget)

21. What is a personal balance sheet?
Cash and items that are easily converted to cash
Record income - record cash outflows - determine net cash flows
A sheet of your finances that helps you come to terms with your net worth
Fixed you know whats being payed each month

22. What are 3 types of personal financial statements?
Balance sheet - cash flow statement - budget
Sell your assets - get another job
FOREVER
Budget - summary of checks - Convenience

23. What are the 3 components of money management?
Cash flow - keeping records - plan (budget)
6 years
The amount of money you make before taxes or deductions
Investments - wages - interest

24. What is a liquid asset?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Cash flow - keeping records - plan (budget)
Personal employment records - tax records
Cash and items that are easily converted to cash

25. What are the steps in the budgeting process?
Assessing (goals) - Planning (budget)
Budget - summary of checks - Convenience
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Needs - goals - personal situation

26. How is net worth calculated?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Assets - liabilities = net worth
Real estate - personal possessions - investment assets
Cash flow - keeping records - plan (budget)

27. How can net worth be increased?
Indicates the difference between your total assets total liabilities at any given date.
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Fixed you know whats being payed each month
Sell your assets - get another job

28. What types of records go in a home file?
A sheet of your finances that helps you come to terms with your net worth
Personal employment records - tax records
Cash flow - keeping records - plan (budget)
What you own

29. Net worth?
Assets - liabilities = net worth
Assessing (goals) - Planning (budget)
Investments - wages - interest
Indicates the difference between your total assets total liabilities at any given date.

30. What is at the heart of financial planning?
Indicates the difference between your total assets total liabilities at any given date.
Needs - goals - personal situation
Daily spending - saving decisions
Personal employment records - tax records

31. How is a net can flow determined?
How ever long you need it!
Cash and items that are easily converted to cash
Money you make subtracted from how much you spend
Fixed - variable

32. What 3 things are spending decisions based upon?
FOREVER
Needs - goals - personal situation
What you owe
Balance sheet - cash flow statement - budget

33. What are some oppertunity cost associated with money management?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Inability to pay debts when they're due
Handling daily business - bills payed on time - taxes - investments
Money you make subtracted from how much you spend

34. Insolvency?

35. Liabilities?
Record income - record cash outflows - determine net cash flows
FOREVER
Personal income and expenditure statement
What you owe

36. How long should you keep birth certificates - social security cards - etc?
Cash or check
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
FOREVER
A sheet of your finances that helps you come to terms with your net worth

37. How long should you keep tax return forms?
6 years
Personal income and expenditure statement
Handling daily business - bills payed on time - taxes - investments
Sell your assets - get another job

38. What are some sources of income?
Fixed - variable
Investments - wages - interest
6 years
Fixed you know whats being payed each month