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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. How long should you keep tax return forms?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Inability to pay debts when they're due
6 years
Daily spending - saving decisions

2. Liabilities?
Record income - record cash outflows - determine net cash flows
What you owe
Balance sheet - cash flow statement - budget
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

3. What are various types of liabilities?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Handling daily business - bills payed on time - taxes - investments
Paper that you give to your employer telling them how much money to take out of your taxes
Needs - goals - personal situation

4. What is the difference between a fixed and variable expense?
Fixed you know whats being payed each month
Sell your assets - get another job
Indicates the difference between your total assets total liabilities at any given date.
Record income - record cash outflows - determine net cash flows

5. What are some sources of income?
Assets - liabilities - net worth
Indicates the difference between your total assets total liabilities at any given date.
Cash and items that are easily converted to cash
Investments - wages - interest

6. How is net worth calculated?
Assets - liabilities - net worth
The amount of money you make before taxes or deductions
FOREVER
Assets - liabilities = net worth

7. What are 3 types of personal financial statements?
What you owe
Personal income and expenditure statement
Balance sheet - cash flow statement - budget
Indicates the difference between your total assets total liabilities at any given date.

8. What are the various types of assets?
Real estate - personal possessions - investment assets
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Paper that you give to your employer telling them how much money to take out of your taxes
What you owe

9. Insolvency?

10. How can net worth be increased?
Sell your assets - get another job
Fixed - variable
Personal income and expenditure statement
A sheet of your finances that helps you come to terms with your net worth

11. What is a cash flow statement?
Record income - record cash outflows - determine net cash flows
Personal income and expenditure statement
Investments - wages - interest
A sheet of your finances that helps you come to terms with your net worth

12. What 2 ways can a person be paid?
Needs - goals - personal situation
Cash or check
Investments - wages - interest
Inability to pay debts when they're due

13. How long should you keep birth certificates - social security cards - etc?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
FOREVER
Assessing (goals) - Planning (budget)
Fixed you know whats being payed each month

14. What is a w-4?
Paper that you give to your employer telling them how much money to take out of your taxes
6 years
Personal income and expenditure statement
Cash or check

15. How long should you keep records on personal property and investments?
Budget - summary of checks - Convenience
How ever long you need it!
Real estate - personal possessions - investment assets
Fixed you know whats being payed each month

16. What is money management?
Sell your assets - get another job
Day to day financial activities used to manage personal financial stuff and security
Assets - liabilities = net worth
How ever long you need it!

17. What are the steps in the budgeting process?
Assessing (goals) - Planning (budget)
Sell your assets - get another job
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

18. What are the 3 components of money management?
Cash flow - keeping records - plan (budget)
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Record income - record cash outflows - determine net cash flows
Sell your assets - get another job

19. What types of records would be stored on a home computer?
Indicates the difference between your total assets total liabilities at any given date.
Assets - liabilities - net worth
Sell your assets - get another job
Budget - summary of checks - Convenience

20. What are the 2 types of cash outflows?
Indicates the difference between your total assets total liabilities at any given date.
Investments - wages - interest
Fixed - variable
How ever long you need it!

21. What 3 things are spending decisions based upon?
Inability to pay debts when they're due
Needs - goals - personal situation
Personal income and expenditure statement
Fixed - variable

22. What is gross pay?
Day to day financial activities used to manage personal financial stuff and security
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
What you own

23. What 3 components are listed on a personal balance sheet?
Indicates the difference between your total assets total liabilities at any given date.
Money you make subtracted from how much you spend
Fixed - variable
Assets - liabilities - net worth

24. What are some oppertunity cost associated with money management?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
The amount of money you make before taxes or deductions
Net worth statement
6 years

25. Cash flow can also be called?
Net worth statement
Indicates the difference between your total assets total liabilities at any given date.
Personal income and expenditure statement
What you own

26. What are the benefits of having an organized system for financial records?
6 years
Money you make subtracted from how much you spend
Assets - liabilities = net worth
Handling daily business - bills payed on time - taxes - investments

27. What is at the heart of financial planning?
Day to day financial activities used to manage personal financial stuff and security
Assessing (goals) - Planning (budget)
Personal income and expenditure statement
Daily spending - saving decisions

28. What is the purpose of personal financial statements?
Personal employment records - tax records
Personal income and expenditure statement
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Forever

29. What is a balance sheet also called?
Record income - record cash outflows - determine net cash flows
Net worth statement
6 years
Personal employment records - tax records

30. What is a liquid asset?
Record income - record cash outflows - determine net cash flows
Net worth statement
Cash and items that are easily converted to cash
FOREVER

31. Assets?
What you own
A sheet of your finances that helps you come to terms with your net worth
Budget - summary of checks - Convenience
Fixed - variable

32. What types of records go in a home file?
Needs - goals - personal situation
Personal employment records - tax records
Budget - summary of checks - Convenience
Assets - liabilities - net worth

33. How long should you keep records on real estate?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Forever
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

34. What is a personal balance sheet?
Assets - liabilities - net worth
Fixed - variable
A sheet of your finances that helps you come to terms with your net worth
Inability to pay debts when they're due

35. How is a net can flow determined?
Balance sheet - cash flow statement - budget
Money you make subtracted from how much you spend
Personal income and expenditure statement
Net worth statement

36. What are the 3 components of a cash flow statement?
Day to day financial activities used to manage personal financial stuff and security
Inability to pay debts when they're due
6 years
Record income - record cash outflows - determine net cash flows

37. What types of records go in a safety deposit box?
What you owe
Balance sheet - cash flow statement - budget
Record income - record cash outflows - determine net cash flows
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates

38. Net worth?
Indicates the difference between your total assets total liabilities at any given date.
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
The amount of money you make before taxes or deductions