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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 some oppertunity cost associated with money management?
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Forever
Real estate - personal possessions - investment assets
Daily spending - saving decisions

2. What is money management?
Investments - wages - interest
Cash or check
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

3. What are the steps in the budgeting process?
Assessing (goals) - Planning (budget)
Fixed - variable
Assets - liabilities = net worth
Investments - wages - interest

4. Insolvency?

5. What is a liquid asset?
Forever
Cash and items that are easily converted to cash
Assessing (goals) - Planning (budget)
Daily spending - saving decisions

6. What is at the heart of financial planning?
How ever long you need it!
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
Daily spending - saving decisions

7. What is the difference between a fixed and variable expense?
How ever long you need it!
Day to day financial activities used to manage personal financial stuff and security
What you own
Fixed you know whats being payed each month

8. Liabilities?
Fixed - variable
How ever long you need it!
What you owe
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

9. What types of records would be stored on a home computer?
The amount of money you make before taxes or deductions
Balance sheet - cash flow statement - budget
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Budget - summary of checks - Convenience

10. What types of records go in a home file?
Cash and items that are easily converted to cash
Budget - summary of checks - Convenience
Fixed you know whats being payed each month
Personal employment records - tax records

11. What is the purpose of personal financial statements?
A sheet of your finances that helps you come to terms with your net worth
Paper that you give to your employer telling them how much money to take out of your taxes
Investments - wages - interest
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

12. What is a personal balance sheet?
Cash flow - keeping records - plan (budget)
Investments - wages - interest
Assets - liabilities - net worth
A sheet of your finances that helps you come to terms with your net worth

13. What is gross pay?
Personal employment records - tax records
Personal income and expenditure statement
Cash and items that are easily converted to cash
The amount of money you make before taxes or deductions

14. Assets?
Money you make subtracted from how much you spend
Personal employment records - tax records
Fixed you know whats being payed each month
What you own

15. What is a balance sheet also called?
Cash and items that are easily converted to cash
How ever long you need it!
Fixed - variable
Net worth statement

16. What are the various types of assets?
Investments - wages - interest
Real estate - personal possessions - investment assets
What you owe
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards

17. What 3 components are listed on a personal balance sheet?
Personal income and expenditure statement
Inability to pay debts when they're due
Balance sheet - cash flow statement - budget
Assets - liabilities - net worth

18. How is net worth calculated?
Assessing (goals) - Planning (budget)
Assets - liabilities = net worth
How ever long you need it!
Fixed you know whats being payed each month

19. 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
What you owe
How ever long you need it!
FOREVER

20. How is a net can flow determined?
A sheet of your finances that helps you come to terms with your net worth
Personal income and expenditure statement
Fixed you know whats being payed each month
Money you make subtracted from how much you spend

21. How long should you keep tax return forms?
6 years
Fixed - variable
Personal income and expenditure statement
FOREVER

22. What are the benefits of having an organized system for financial records?
Inability to pay debts when they're due
Handling daily business - bills payed on time - taxes - investments
A sheet of your finances that helps you come to terms with your net worth
Balance sheet - cash flow statement - budget

23. What 2 ways can a person be paid?
Current (less 1 year) credit card bill - long term (more than a year) mortgage
Cash or check
Needs - goals - personal situation
Record income - record cash outflows - determine net cash flows

24. What types of records go in a safety deposit box?
Cash or check
Real estate - personal possessions - investment assets
Birth marriage - death certificates - copy of will - Citizenship papers - stock and bond certificates
Personal income and expenditure statement

25. What are some sources of income?
Cash and items that are easily converted to cash
Balance sheet - cash flow statement - budget
Investments - wages - interest
Cash flow - keeping records - plan (budget)

26. What is a w-4?
How ever long you need it!
Needs - goals - personal situation
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

27. What 3 things are spending decisions based upon?
How ever long you need it!
What you owe
Daily spending - saving decisions
Needs - goals - personal situation

28. Net worth?
Personal employment records - tax records
Personal income and expenditure statement
What you own
Indicates the difference between your total assets total liabilities at any given date.

29. What are various types of liabilities?
Indicates the difference between your total assets total liabilities at any given date.
Budget - summary of checks - Convenience
Needs - goals - personal situation
Current (less 1 year) credit card bill - long term (more than a year) mortgage

30. How long should you keep records on real estate?
Assessing (goals) - Planning (budget)
Real estate - personal possessions - investment assets
Inability to pay debts when they're due
Forever

31. What are 3 types of personal financial statements?
Cash or check
Sell your assets - get another job
What you own
Balance sheet - cash flow statement - budget

32. How can net worth be increased?
Sell your assets - get another job
What you own
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Cash and items that are easily converted to cash

33. What are the 2 types of cash outflows?
Assessing (goals) - Planning (budget)
Record income - record cash outflows - determine net cash flows
Indicates the difference between your total assets total liabilities at any given date.
Fixed - variable

34. What are the 3 components of a cash flow statement?
Money you make subtracted from how much you spend
Real estate - personal possessions - investment assets
Record income - record cash outflows - determine net cash flows
Balance sheet - cash flow statement - budget

35. How long should you keep records on personal property and investments?
FOREVER
How ever long you need it!
Assets - liabilities - net worth
Daily spending - saving decisions

36. What is a cash flow statement?
What you own
Cash or check
Net worth statement
Personal income and expenditure statement

37. Cash flow can also be called?
Inability to pay debts when they're due
Credit vs future income - current living expenses vs savings/interest - saving purchases vs interest money
Personal income and expenditure statement
What you owe

38. What are the 3 components of money management?
Cash flow - keeping records - plan (budget)
Fixed - variable
Report your financial sit - measure progress towards goals - provide data for preparing taxes/credit cards
Handling daily business - bills payed on time - taxes - investments