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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 types of records go in a home file?
Personal employment records - tax records
The amount of money you make before taxes or deductions
Day to day financial activities used to manage personal financial stuff and security
Fixed you know whats being payed each month

2. Cash flow can also be called?
Personal income and expenditure statement
Fixed - variable
Money you make subtracted from how much you spend
Cash flow - keeping records - plan (budget)

3. How long should you keep records on personal property and investments?
Record income - record cash outflows - determine net cash flows
How ever long you need it!
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Fixed you know whats being payed each month

4. What types of records go in a safety deposit box?
The amount of money you make before taxes or deductions
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Net worth statement
Real estate - personal possessions - investment assets

5. How is net worth calculated?
Budget - summary of checks - Convenience
Day to day financial activities used to manage personal financial stuff and security
Assets - liabilities = net worth
6 years

6. What are 3 types of personal financial statements?
What you own
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Cash and items that are easily converted to cash
Balance sheet - cash flow statement - budget

7. What are some oppertunity cost associated with money management?
Day to day financial activities used to manage personal financial stuff and security
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
Handling daily business - bills payed on time - taxes - investments

8. What are some sources of income?
6 years
FOREVER
Investments - wages - interest
Budget - summary of checks - Convenience

9. What types of records would be stored on a home computer?
Record income - record cash outflows - determine net cash flows
Day to day financial activities used to manage personal financial stuff and security
Budget - summary of checks - Convenience
Assets - liabilities = net worth

10. What is a cash flow statement?
Budget - summary of checks - Convenience
Investments - wages - interest
Personal income and expenditure statement
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates

11. What is gross pay?
Cash flow - keeping records - plan (budget)
The amount of money you make before taxes or deductions
Forever
6 years

12. How is a net can flow determined?
Money you make subtracted from how much you spend
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Assets - liabilities - net worth
Fixed you know whats being payed each month

13. How can net worth be increased?
Sell your assets - get another job
Inability to pay debts when they're due
How ever long you need it!
Money you make subtracted from how much you spend

14. How long should you keep records on real estate?
Forever
Fixed you know whats being payed each month
Daily spending - saving decisions
Assets - liabilities - net worth

15. What are the 3 components of money management?
What you own
Cash flow - keeping records - plan (budget)
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Indicates the difference between your total assets total liabilities at any given date.

16. What are the 3 components of a cash flow statement?
Inability to pay debts when they're due
Record income - record cash outflows - determine net cash flows
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Personal employment records - tax records

17. What is a w-4?
Paper that you give to your employer telling them how much money to take out of your taxes
Fixed you know whats being payed each month
The amount of money you make before taxes or deductions
Fixed - variable

18. Liabilities?
Paper that you give to your employer telling them how much money to take out of your taxes
Sell your assets - get another job
Investments - wages - interest
What you owe

19. Net worth?
Assets - liabilities - net worth
Indicates the difference between your total assets total liabilities at any given date.
Daily spending - saving decisions
Cash and items that are easily converted to cash

20. What are various types of liabilities?
What you own
Money you make subtracted from how much you spend
Current (less 1 year) credit card bill - long term (more than a year) mortgage
The amount of money you make before taxes or deductions

21. What 3 things are spending decisions based upon?
Needs - goals - personal situation
Sell your assets - get another job
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Record income - record cash outflows - determine net cash flows

22. What are the various types of assets?
Assets - liabilities - net worth
Forever
Real estate - personal possessions - investment assets
What you owe

23. What is a balance sheet also called?
Budget - summary of checks - Convenience
Net worth statement
Money you make subtracted from how much you spend
A sheet of your finances that helps you come to terms with your net worth

24. What are the 2 types of cash outflows?
6 years
Fixed - variable
Assets - liabilities = net worth
Current (less 1 year) credit card bill - long term (more than a year) mortgage

25. What are the benefits of having an organized system for financial records?
How ever long you need it!
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Handling daily business - bills payed on time - taxes - investments
Cash or check

26. What is the difference between a fixed and variable expense?
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Fixed you know whats being payed each month
Paper that you give to your employer telling them how much money to take out of your taxes

27. What is a liquid asset?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Assets - liabilities = net worth
Cash and items that are easily converted to cash
6 years

28. What is the purpose of personal financial statements?
Fixed you know whats being payed each month
How ever long you need it!
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Net worth statement

29. What are the steps in the budgeting process?
Inability to pay debts when they're due
Cash flow - keeping records - plan (budget)
Assessing (goals) - Planning (budget)
Current (less 1 year) credit card bill - long term (more than a year) mortgage

30. What is at the heart of financial planning?
The amount of money you make before taxes or deductions
Daily spending - saving decisions
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Sell your assets - get another job

31. Insolvency?

32. What is a personal balance sheet?
Balance sheet - cash flow statement - budget
Money you make subtracted from how much you spend
The amount of money you make before taxes or deductions
A sheet of your finances that helps you come to terms with your net worth

33. How long should you keep tax return forms?
6 years
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Fixed you know whats being payed each month
Cash flow - keeping records - plan (budget)

34. What is money management?
Day to day financial activities used to manage personal financial stuff and security
Real estate - personal possessions - investment assets
Investments - wages - interest
Personal income and expenditure statement

35. What 3 components are listed on a personal balance sheet?
Assets - liabilities - net worth
Sell your assets - get another job
Assessing (goals) - Planning (budget)
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

36. Assets?
What you own
6 years
Fixed you know whats being payed each month
Assessing (goals) - Planning (budget)

37. What 2 ways can a person be paid?
What you owe
Cash or check
6 years
Handling daily business - bills payed on time - taxes - investments

38. How long should you keep birth certificates - social security cards - etc?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
FOREVER
What you own
Inability to pay debts when they're due